According to the financial sector, the Financial Services Commission has begun a three-week subscription period for the fund, which will be available on a first-come, first-served basis. This year, the total fundraising target is set at 600 billion won, with subscriptions available through 10 major banks and 15 securities firms, either in-person or online.
Due to the first-come, first-served nature of the offering, it may close early if the allocation is exhausted. The government has allocated 20% (120 billion won) of the total sales for the first two weeks (until June 4) specifically for low-income individuals, targeting those with an annual earned income of 50 million won or less, or a total income of 38 million won or less. Additionally, during the first week, online subscriptions will be limited to 50% of the total.
The investment limit is set at 100 million won per person annually, with a maximum of 200 million won over five years. The minimum subscription amount varies by sales firm, ranging from 100,000 won to 1 million won.
Tax benefits are available for those who maintain their investment in a dedicated account for three years. A tax deduction of 40% applies to amounts up to 30 million won, 20% for amounts between 30 million and 50 million won, and 10% for amounts between 50 million and 70 million won, with a maximum deduction of 18 million won.
Investors who hold their investment for over five years will benefit from a separate taxation rate of 9.9% on dividend income, which can help reduce health insurance premiums and the burden of comprehensive taxation on financial income. However, to receive these tax benefits, individuals must obtain and submit an income verification certificate for the Individual Savings Account (ISA) from the National Tax Service or the Government 24 website.
Moreover, individuals who were subject to comprehensive taxation on financial income at any point between 2023 and 2025 can only subscribe through a general account, which has an annual limit of 30 million won. Comprehensive taxation on financial income applies when the total interest and dividend income exceeds 20 million won in a year.
The National Growth Fund is a policy fund co-created by the government and the private sector. It will pool public funds to create a master fund, which will then be invested in 10 sub-funds related to advanced strategic industries, combining government finances and private investment. The government plans to raise 3 trillion won (600 billion won annually) from the public over five years out of a total of 150 trillion won. In the event of losses in the sub-funds, the government will cover up to 20% of the public investment using its subordinate financial contributions.
However, it is important to note that the loss coverage applies to the public investment amount, not the total losses of the fund. For instance, if a sub-fund consists of 1 billion won in public investment, 200 million won in government finances, and 120 million won in private investment, and losses occur, the government will only cover losses up to 200 million won, which is 20% of the public investment. Therefore, the proportion of government loss coverage relative to the total size of the individual sub-fund may be lower than 20%.
Additionally, investors will not be able to redeem their investments for five years, and the fund is classified as a high-risk investment product with no principal guarantee. As a result, individuals must undergo a suitability assessment to determine if their investment profile aligns with this product.
* This article has been translated by AI.
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