New Online Platform For HNWIs Targets Australian Investment Tax Break

Tom Burroughes

11 July 2016

An Australian online platform, , which is aimed at high net worth investors and early-stage companies seeking funding, has opened for business, aiming to tap into new tax reliefs.

Starting in July, HNW individuals and institutions can obtain tax incentives worth up to A$200,000 ($150,015) a year if they put money into an early-stage investment. Legislation means a company seeking funding must have the status of an "early stage innovation company" (ESIC).

The platform's founder, Stephen Crowe, believes capital will start to shift to ESICs as an investment vehicle of choice for entrepreneurs, innovators, researchers and investors.

“ESIC Hub will connect serious start-ups and investors and deliver the solutions they need. It is an independent connector and validator for early-stage businesses, investors and their advisors, so that they can move to their negotiations with confidence,” Crowe said in a statement.

The launch is a sign of how governments around the world, mindful of a need to encourage business start-ups to bolster economic growth, have created tax incentives. In the UK, for example, there are structures such as enterprise investment schemes (EIS) and “seed EIS” vehicles, as well as tax-advantaged venture capital trusts.

To qualify for the tax savings in the Australian scheme, investors need to obtain a qualifying ESIC certificate issued by an appropriately qualified, independent tax expert, such as through ESIC Hub, at the time of investment, the firm said.