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.