Crowd-funding bill to give tax breaks to early stage investors
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).
AUTHOR
Nicholas O'Donoghue
Recommended for you
The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted.
After seven weeks of strong growth, Wealth Data analysis shows financial adviser gains are now tapering off and returning to a regular pace.
Count chief executive Hugh Humphrey has said FY25 was a “milestone year” for the business as it completed its Diverger integration, exceeding targets with $5.1 million in cost synergies.
US wealth manager Focus Financial Partners, which includes Australia’s Escala Partners, has appointed a chief strategy officer to fuel further Australian growth.
