A Standalone Corporate Research Institute Act: What Changed
On February 1, 2026, Korea's Act on Support for Research and Development of Corporate Research Institutes (the "Corporate Research Institute Act") took effect, together with its Enforcement Decree (Presidential Decree No. 36055) and Enforcement Rules. The recognition system for corporate R&D labs and dedicated R&D departments used to sit inside the Basic Research Promotion Act. It now has its own law.
The reform does two things. It relaxes the rules on research space and staffing, and it tightens oversight after recognition. Recognition is the gateway to several benefits: the R&D and human resources development tax credit, credits for dedicated researchers' salaries, eligibility and bonus points in government R&D programs, and alternative military service placements for researchers. Keeping your recognition is therefore a cash-flow issue, not just paperwork.
Relaxed Requirements SMEs Can Use
Tougher Oversight: On-Site Inspections and Ex Officio Revocation
The Minister of Science and ICT may conduct on-site inspections to check that recognition criteria are still met and that reported changes are accurate. Refusing, obstructing or evading an inspection without good reason is itself grounds for revocation.
The bigger change: a lab facing ex officio revocation can no longer withdraw voluntarily instead. The old exit route of filing a voluntary cancellation before problems surfaced is closed. The change follows repeated criticism in National Assembly audits and the press of "paper labs" that met only the formal requirements while claiming tax credits.
What Inspectors Actually Look For
For example, take a small company recognized with three dedicated researchers. If one leaves and the company neither replaces nor reports the departure, it can be cited for both the staffing shortfall and the missing report.
Self-Check Before Year-End Tax Credit Filing
Options for New Labs or Converting a Dedicated Department
A dedicated R&D department needs only one dedicated researcher, regardless of company size. Under the previous standards, a full lab needed at least 2 researchers for venture companies, 3 for small enterprises (2 if founded within the past three years) and 5 for medium-sized enterprises. Check the details against the new Enforcement Decree. For early-stage firms, a realistic path is to start as a dedicated department and convert to a lab as headcount grows. Because movable partitions are now allowed, securing space is also easier than before.
Review Your Lab with KITIM
KITIM supports the full process: setting up labs and dedicated departments, filing change reports, running operational reviews to prepare for inspections, and linking recognized labs to government R&D applications. If you want your lab checked before year-end tax filing, contact KITIM today for a consultation.