Crowd-funding bill to give tax breaks to early stage investors

11 February 2016
| By Nicholas |
image
image
expand image

Investors who support start-ups in their early stages will be given tax breaks under the Government's Crowd-sourced equity funding Bill.

Under the legislation, which received the backing of the House of Representative yesterday, Australian start-ups will be able to raise $5 million each year — a figure that is higher than the caps governing similar legislation in the US and New Zealand.

Assistant Treasurer, Kelly O'Dwyer, said the Bill provided new tax breaks for "early stage investors", and also make existing Employee Share Schemes rules more user-friendly to help owners to attract and retain quality staff.

"The intent of this Bill is to assist start-ups and other small businesses that may have difficulty accessing equity funding due to the costs of disclosure and other requirements, while protecting mum and dad investors," she said.

"The Government crafted this Bill after extensive stakeholder consultation and considering international models.

"Australia's new CSEF model is internationally competitive with the issuers able to fundraise up to $5 million each year, which is higher than the US and New Zealand cap."

Australia's new model:

  • allows unlisted public companies with less than $5 million in assets and less than $5 million in annual turnover;
  • sets an investor cap of $10,000 per issuance per 12-month period (this is higher than the average in New Zealand and the UK);
  • provides a five year holiday from some reporting and governance requirements for unlisted public companies; and
  • will protect investors with a cooling off period of five days after making an investment (this is shorter than Italy and in some cases in the US).
Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago