The Australian Government’s Early Stage Venture Capital Limited Partnerships (ESVCLP) program is providing fund managers and investors with tax exemptions and other incentives to drive growth in early-stage Australian businesses.
The program aims to stimulate the early-stage venture capital sector in Australia by:
- Helping fund managers attract pooled capital, so they can raise new venture capital funds of between $10 million and $200m to invest in innovative early-stage businesses
- Offering tax benefits to fund managers and investors
- Connecting investors with early-stage businesses
- Helps Australian businesses grow by receiving financial support and guidance from expert advisers
Fund managers can apply to Innovation and Science Australia to register a partnership as an ESVCLP.
There is no closing date for applications, you can apply any time using the online form.
How does it work?
An ESVCLP must be established as a new partnership rather than a restructured one.
To register, applicants must submit an application to the Innovation and Science Australia’s Innovation Investment Committee under the Venture Capital Act 2002 (VCA). The committee will register a partnership as an ESVCLP if it meets the required eligibility criteria.
Once registered, an ESVCLP can invest in early-stage venture capital opportunities within companies or unit trusts at the following development stages:
- Pre-seed
- Seed
- Startup
- Early expansion
These investments must satisfy additional criteria and be retained for at least 12 months.
An ESVCLP is also required to adhere to ongoing registration and reporting obligations under the VCA to maintain its status.
Upon registration, both investors and fund managers can access tax benefits, which vary between the two groups.
Additionally, the Foreign Investment Location Test applies when an Australian-based ESVCLP invests in companies situated outside Australia.
The program is jointly administered by the Department of Industry, Science, Energy and Resources and the Australian Taxation Office (ATO) on behalf of the Australian Government.
