<h1>South Korea’s Social Enterprise System: Discussion on Transitioning from “Certification” to “Registration”</h1>

Social enterprises in South Korea have played an important role in solving social problems and creating jobs. Unlike regular businesses that primarily pursue profits, social enterprises pursue both “profit” and “social value,” acting as a bridge between the private and public sectors.

 

South Korea officially recognizes social enterprises through a “certification” system that acknowledges their dual role in generating profit and delivering social impact.

 

Current Social Enterprise Certification System

 

Under the Social Enterprise Promotion Act (enacted in 2007), South Korea operates a social enterprise certification system. This system certifies companies that meet specific criteria as social enterprises, administered by the government.

 

Certification helps build trust with consumers and the general public and provides certified enterprises with support such as management assistance, market access, and tax benefits. This support is especially crucial for newly established social enterprises to ensure their sustainability.

 

The certification process involves submitting an application, document review and on-site inspection (including partial Social Value Index [SVI] evaluation), preliminary review by the Certification Review Committee, deliberation by the Social Enterprise Promotion Committee, and finally, the issuance of the certification.

 

Certification Process of Social Enterprises as Posted by the Korea Social Enterprise Promotion Agency (Source: Screenshot from the Korea Social Enterprise Promotion Agency Website)

Applicants choose the appropriate business model type based on their social value, such as social service provision, job creation, community contribution, or mixed types.

 

The certification system played a vital role during the early expansion of social enterprises in South Korea. Certified social enterprises benefit from financial support, tax incentives, and priority in public procurement, while the rigorous certification standards instill pride among certified enterprises.

 

Discussion on Transitioning to a Registration System

 

Recently, there have been increasing calls to replace the current certification system with a “registration” system. Under registration, any enterprise pursuing social value can register more easily, lowering the entry barriers. In fact, the government announced in 2022 plans to promote such a transition.

 

However, opinions in the field are divided. Some argue that the certification system creates barriers to entry, while others worry that a registration system could lead to an influx of low-quality social enterprises.

 

Preparing for Registration Through Social Value Measurement

 

Blindly switching from certification to registration is challenging. To address this, the Korea Social Enterprise Promotion Agency has developed the Social Value Index (SVI) to objectively measure the social value created by social enterprises (including social economy enterprises).

 

Using this index helps maintain quality standards while allowing more enterprises to enter the social enterprise ecosystem and pursue both social purpose and profit.

 

Conclusion

 

As of August 2025, South Korea still operates the social enterprise certification system, with many enterprises working hard to meet its stringent criteria.

 

With the potential transition to a registration system, it is necessary to design a flexible system that combines the strengths of both certification and registration, allowing more social enterprises to participate and grow freely.

 

Such a system will revitalize the social enterprise ecosystem and foster an environment where more enterprises can engage in solving social problems, thereby contributing to sustainable social value creation.