Objective
To increase the supply of funding to the early‑stage venture capital sector in Australia through the introduction of an investment vehicle with flow-through taxation treatment and with no tax liability on the investment gains for investors.
Significance for Australia
The measure will benefit start-up companies and small and medium enterprises by increasing the pool of money available for early-stage entities with strong growth potential. This, in turn, will benefit the Australian economy.
The ESVCLP vehicle is a vehicle for attracting investment in early-stage companies by superannuation funds and individual investors.
The Australian Government wants more Australian technologies and innovations to be commercialised locally to increase the spillover benefits in Australia.
Departmental role and current achievements
The ESVCLP initiative became operational on 21 June 2007, following the implementation of the necessary legislative amendments. The Department was involved in the development of legislation to implement the ESVCLP.
An ESVCLP may only invest in business entities with total assets of not more than $50 million. The ESVCLP must divest its holdings when an investee entity's total assets exceed $250 million.
The ESVCLP's investment plan must have an appropriate focus on early-stage venture capital.
The NSW and Victorian Governments have amended their Partnership Acts to enable the new ESVCLP entities to register as incorporated limited partnerships. The ACT Government has introduced a Bill to amend its Partnership Act accordingly and other States and Territories are expected to make appropriate amendments in due course.
To access the concessional taxation arrangements, an ESVCLP must be registered with Innovation Australia 
(the Board). AusIndustry, a division of the Department of Innovation, Industry, Research and Science, works with the Venture Capital Committee of Innovation Australia to deliver the program.
Targets for 2008-09
- To develop awareness of the ESVCLP initiative with the both domestic and international investors
- To facilitate increased investment by all investors in Australian early-stage venture capital
For further information
Phone: AusIndustry hotline, 13 28 46 (within Australia)
Email: hotline@ausindustry.gov.au
Web: www.ausindustry.gov.au
May 2008