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How does this help investors?
New tax incentives for investors using early stage venture capital limited partnerships (ESVCLPs) are encouraging more people to consider investing in high-potential, early stage Australian companies.
Through ESVCLPs investment funds provide critical expertise to young companies, and the new NISA arrangements also allow ESVCLP funds to manage larger amounts of capital and to back companies whose value exceeds $250 million.
Right Click Capital is an ESVCLP which backs Australian internet tech start-ups that have the potential to go global. The fund’s manager Benjamin Chong says the new 10 per cent tax offset available to people investing through ESVCLPs means investors can now “put their toe in the water to early stage Australian companies on a very favourable basis”.
“Investors can receive capital gains tax free status for complying investments made through ESVCLPs, making it a very attractive asset class for investors,” he says.