Despite years of government efforts to remove regulations that hinder investment and employment, too many old and new regulations continue to discourage business activities in South Korea, some even discouraging local firms from expanding their size, a report said Wednesday.

According to the report from the Federation of Korean Industries, a business lobby that represents the country's top 600 companies, large firms were currently subject to 81 separate regulations under 39 laws as of end-July.

The number compares with 63 regulations governing mid-sized firms, which also means a midsized company will be subject to an additional 18 regulations once it is labeled a large firm, the report noted.

A company automatically becomes a large firm or a conglomerate once it hires more than 300 employees and has more than 100 billion won ($89.7 million) in assets.

But because additional regulations inevitably lead to additional costs, many local firms often choose to remain small, the report insisted.

For instance, as soon as a company has more than 300 full-time workers, it has to hire a certain number of socially or physically disadvantaged workers, while a firm with fewer than 300 employees faces no such regulation.

Also, a listed firm with more than 100 billion won in assets must hire a full-time auditor, while a firm with more than 300 workers and more than 7 billion won in assets must have their books approved by external auditors, the FKI said in a press release.

The FKI also noted nearly half, or 39 of 81 government regulations that currently control large conglomerates here, were enacted in just eight years, from 2008-2016.

"There needs to be a thorough review of regulations that affect large companies to help remove the so-called Peter Pan syndrome among small firms, where they refuse to grow," it said. (Yonhap)