Early-Stage Innovation Company (ESIC) Eligibility

Early-Stage Innovation Company (ESIC) Eligibility

What is an ESIC – Early-Stage Innovation Company?

As a small business or start-up looking to expand, you may qualify as an Early-Stage Innovation Company or ESIC.  This initiative was launched in 2015 to drive local investment, promote economic growth and innovation within the Australian business ecosytem.

What is an ESIC – Early-Stage Innovation Company?

 

What are the benefits of ESICs?

During the start-up stage, between initial investment and generating revenue, maintaining cash flow is always a challenge.  The ESIC scheme is designed to help businesses look attractive to investors so that start-ups can get funds into the business.

Businesses that qualify for ESIC status will be open to investment opportunities to fuel their innovation and growth.  As investors receive their own set of benefits, eligible ESIC companies will obtain investment more easily.

Investors are eligible for tax both short- and long-term tax incentives including:

  • 20% non-refundable carry forward tax offsets on eligible investments.  The maximum benefit amount is capped at a combined tax offset of $200,000 for investors and affiliates per income year.
  • Modified Capital Gains Tax (CGT) treatment.  
    • Qualifying shares that are continuously held for a period between 12 months and 10 years may have their Capital Gains disregarded.  
    • Capital Losses may be disregarded for shares held for less than 10 years.

How do I qualify as an Early-Stage Innovation Company?

ESIC reports must be lodged annually with the ATO in order to ensure companies are still elig