The Federal Government has made changes to the tax treatment of venture capital, including lowering the minimum amount required to enter into the Early Stage Venture Capital Limited Partnership (ESVCLP) to $5 million.
The amount was lowered from $10 million to facilitate increased funding from "angel" investors, the Government stated.
The changes came in response to the Board of Taxation's recommendations on the venture capital limited partnerships regime.
The Government agreed with all of the Board of Taxation's recommendations, which it claims will help "better meet the objective of increasing investment in high-risk start-ups and expanding businesses in the Australian venture capital sector".
"These reforms will help Australia grow new innovative businesses and will promote Australia as a location for investment in innovation," said Assistant Treasurer David Bradbury.
The Venture Australia package also includes a new $350 million round of equity funding for the Innovation Investment Fund program to attract private sector investment into this high-growth and high-risk area.
These changes will also see the phasing out of the Pooled Development Fund (PDF) program over a number of years in consultation with stakeholders.
