Qualifying as an Early Stage Innovation Company (ESIC) assists with raising capital by providing tax incentives for early stage investors with concessional tax treatment for investments made in qualifying ESIC’s, such as start-ups, with high growth potential.
The ESIC legislation has benefits for small and medium enterprises, entrepreneurs, and inventors who have some innovative products, processes, services, organisational or marketing methods that wish to raise capital.
There are also significant benefits for investors via a tax rebate, based on an investor’s investment and potential CGT exemption on that investment in an ESIC.
Investors can obtain a tax offset calculated at 20% on their investment, up to a maximum of $200,000 per annum for sophisticated investors and $10,000 per annum for retail investors. The maximum investment for a retail investor is $50,000 per annum.
An investor can also obtain a CGT exemption if shares are held for more than one year and less than 10 years.
Qualifying as an Early Stage Innovation Company will be a great boost to you in attempting to raise investment funds from investors. You need the best possible advice to ensure that, if appropriate, you’re able to qualify as an Early Stage Innovation Company.
If you are interested in having a conversation about the Early Stage Innovation Company requirements, contact us today.