The government's planned March launch of the Return to Domestic Market Account (RIA), designed to lure Korean investors back from overseas markets, now appears unlikely to meet its target date.
The RIA initiative was premised on legislative passage during this month's extraordinary National Assembly session. However, the standing committee is not expected to table the bill until late this month, raising the likelihood of delays.
President Lee Jae-myung has urged lawmakers to accelerate legislation supporting his policy agenda, yet economic bills continue to languish. Legislation on digital asset regulation, embezzlement law reform, and agrivoltaic systems faces mounting delays.
According to political sources on Sunday, the National Assembly's Strategy and Finance Committee plans to convene a subcommittee after the Lunar New Year holiday to review amendments to the Special Tax Treatment Control Act required for the RIA launch.
The Democratic Party of Korea initially targeted passage in the February plenary session. However, internal party merger debates, turmoil within the People Power Party, and competing priorities such as the Special Act on U.S. Investment have delayed discussions until now.
"The date hasn't been finalized, but we expect to convene the subcommittee before February ends," said a Democratic Party lawmaker on the committee.
The RIA would exempt capital gains taxes on overseas stock sales for investors who reinvest domestically. The program aims to stabilize foreign exchange markets and revitalize domestic capital markets by channeling foreign currency holdings back into Korea.
While the Democratic Party has set March 5 as its target date, uncertainty remains as substantive negotiations with the People Power Party and other opposition parties have yet to begin. Some observers suggest the bill may not pass until after March.
The delay poses a structural problem: investor benefits diminish as legislation stalls. Under current proposals, investors selling overseas stocks by the end of the first quarter would receive full capital gains tax exemption, with benefits declining in phases thereafter. Without adjustments during negotiations, investors could face reduced benefits.
"Key committee members are juggling schedules with the Special Committee on U.S. Investment, which could further delay discussions," a Democratic Party official said.
The Democratic Party's plan to finalize contentious prosecutorial and judicial reform bills within February adds another complication. If these priority bills advance first, the People Power Party may deploy filibusters against even non-contentious legislation. This could limit the Assembly to processing one bill per day, pushing economic legislation further back.
Legislative momentum is expected to slow further as both parties shift focus to the June 3 local elections starting in March. The Democratic Party has designated 129 livelihood-related bills as priorities for passage in the February session.
Legislative delays are spreading across economic bills broadly. The 60 trillion won Bitcoin overpayment incident at Bithumb, Korea's second-largest cryptocurrency exchange, has clouded prospects for second-stage legislation of the Digital Asset Basic Act governing stablecoins and other virtual assets.
The Democratic Party originally planned to finalize its proposal by January 13, before the Lunar New Year holiday. However, the exchange's exposed internal control weaknesses may prolong discussions.
Agrivoltaic legislation remains stalled. Agrivoltaics, which involves installing solar panels above farmland for simultaneous crop cultivation and electricity generation, is considered beneficial for climate response and farm income stability. Yet the bill has not been substantively discussed in committee since its introduction last July.
The Agricultural Cooperative Reform Act, aimed at improving management transparency at the National Agricultural Cooperative Federation and regional cooperatives, also remains deadlocked over partisan disagreements.
Government-proposed embezzlement law reforms, presented as complementary measures to commercial law amendments, have likewise stalled. The government and Democratic Party announced plans to abolish criminal embezzlement provisions under the Criminal Act in September and December last year as part of "Economic Criminal Law Rationalization Measures," but replacement legislation has not materialized.
On January 26, eight major business groups including the Korea Enterprises Federation and Korea Chamber of Commerce and Industry urged the government and National Assembly to pursue "unconditional comprehensive reform of embezzlement laws." Yet even the outlines of alternative legislation remain unclear.
Meanwhile, commercial law amendments that critics say increase criminal liability risks for corporations are advancing rapidly, raising concerns about business contraction. The Democratic Party plans to pass a third round of commercial law revisions mandating treasury stock cancellation as early as this month.