Village Enterprise Designation Requirements and Procedure — 5 Resident Investors, 70% Resident Ratio and Required Documents

Procedure

1. 1. Check the local resident definition and investor makeup

   A local resident is a person whose resident registration is in the eup, myeon or dong where the village enterprise is located and active, or a person who works at a workplace or runs a business there. At least 5 local residents must be investors, and local residents must make up at least 70% of all investors. Where residents are recognized at the city/county/district level, the threshold is 80% (except in population decline areas), and enterprises meeting the youth membership ratio need at least 50%.

2. 2. Set investment shares and the corporate form

   No single investor may hold more than 30% of the investment, and the combined investment of an investor and their spouse, lineal ascendants or descendants and siblings may not exceed 50% of the total. The applicant must take a corporate form such as a corporation under the Civil Act or a company under the Commercial Act, and the representative must be a local resident. The articles of incorporation and investor register are organized to meet these rules.

3. 3. Show the four requirements in the business plan

   The law requires community character (residents take part in decisions and profits return to residents), public character (contribution to the local community), local character (use of local resources) and business viability (real operations and the ability to earn revenue). Detailed criteria are set by the Minister of the Interior and Safety, so the business plan follows the evaluation criteria in that year's call. The plan also shows that activities center on the area where the enterprise is located.

4. 4. Apply to the city/county/district under the annual call

   The Ministry of the Interior and Safety announces designation criteria, application methods and required documents every year, and the provincial or metropolitan government handles the call. The application and supporting documents are filed with the local city/county/district office, which reviews the representative, investment, corporate form and local activity requirements and carries out an on-site check. The provincial or metropolitan government then reviews the community and other requirements, the Central Village Enterprise Promotion and Support Committee deliberates, and the city/county/district office notifies the result.

5. 5. Operations and cancellation after designation

   If the investor makeup or corporate form changes after designation and the requirements are no longer met, the designation may be cancelled after a hearing. An enterprise notified of cancellation must submit a performance report within 14 days of the notice and is subject to measures such as subsidy repayment. An enterprise that finds it hard to continue may also request cancellation itself.

Required documents

• Village enterprise designation application (form in that year's call)
• Business plan
• Articles of incorporation
• Corporate registration certificate
• Investor register and proof of investment payment
• Proof that investors are local residents (resident registration abstract, certificate of employment or business registration certificate, etc.)
• Minutes of general meetings or board meetings showing resident participation in decisions
• Letter of authorization (when filed by an agent)

Fees

Industry range of several hundred thousand won to several million won · Fees are explained after consultation, depending on whether incorporation is prepared at the same time, the number of investors and the scope of resident verification, and the length of the business plan. Government fees are separate.

See fees and official charges for this service →

Legal basis and review date

• Act on the Promotion and Support of Village Enterprises Article 2
• Act on the Promotion and Support of Village Enterprises Article 11
• Act on the Promotion and Support of Village Enterprises Article 12
• Act on the Promotion and Support of Village Enterprises Article 13
• Act on the Promotion and Support of Village Enterprises Article 21
• Act on the Promotion and Support of Village Enterprises Article 22
• Enforcement Decree of the Act on the Promotion and Support of Village Enterprises Article 3
• Enforcement Decree of the Act on the Promotion and Support of Village Enterprises Article 14
• Enforcement Decree of the Act on the Promotion and Support of Village Enterprises Article 15
• Enforcement Decree of the Act on the Promotion and Support of Village Enterprises Article 17
• Enforcement Decree of the Act on the Promotion and Support of Village Enterprises Article 18
• Enforcement Decree of the Act on the Promotion and Support of Village Enterprises Article 22
• Enforcement Decree of the Act on the Promotion and Support of Village Enterprises Annex

Checked against the statutes on 2026-10-07

Statutes and public notices change, so each case needs to be checked individually. Statute titles are given in English for reference. The Korean statutes are the authoritative text.

Check these first

• If investors change after designation and the resident ratio or the 30% cap per investor is no longer met, the designation may be cancelled, so recalculate the requirements before transferring any investment shares.
• Designation criteria, evaluation items and required documents are set in each year's call, so check that year's announcement before applying.

Frequently asked questions