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Sep 21, 2016

The Australian government has introduced legislation to assist innovative companies to be able to raise capital.  This legislation, which commenced operations from 1st July 2016, is called the "Early Stage Innovation Company".  An Early Stage Innovation Company will normally be a small/medium enterprise, an inventor who, at this stage might not even have a company or an entrepreneur.  At present most of these businesses or companies will probably be very small and, if they are paying accountants for professional services and some of them will not even be doing that at this stage, the fees are probably in the vicinity of $2,000.

Companies which aspire to be an Early Stage Innovation Company will be able to raise capital from investors.  The investors will receive attractive taxation benefits.  They'll receive a 20% tax offset on their investment, up to a maximum of $200,000 for a sophisticated investor and $10,000 for a retail investor.  They will also receive a capital gains tax exemption from the end of the first twelve months of their shareholding to the end of the ninth year of their shareholding.