What is the Tax Incentive for Early Stage Investors?

Australia has adopted a program giving investors tax breaks when they invest in equity in certain small companies (Startups).


It gives investors:

Conditions Apply***

Who can be an early stage investor? 

Certain rules apply to limit who benefits:

Investment Amount

 $200,000 per annum - Wholesale investors limit

 $50,000 per annum -Retail investors are limit

The Retail investor cap is fixed (i.e. any amount above it will invalidate the claim)

The Wholesale cap its not fixed (i.e. investment above this amount impacts the tax offset, not the CGT exemption)

Ineligible Investors 

Widely held companies and their 100% subsidiaries

An Affiliate of the issuer (i.e. someone who could direct decision making)

Significant Shareholders (30%)

Employee Share Scheme Interests

Investing Early

How can I invest in early stage companies?

You can find qualified ESIC companies listed in our directory

"ESIC Directory"

Firstly, you must invest in the right company at the right time to gain the early stage company tax concessions. These companies must have specific attributes to access the program including:

This deliberately targets the concession at loss making, high potential businesses who need capital to grow.

Secondly, the company must prove that it is an eligible  innovation company by either;


Investors will seek to rely on the company founders or advisers to validate ESIC for them, however the ultimate responsibility remains with them.

That's why we developed a record keeping guide and a number of helpful resources to show how hard it can be to provide evidence, from the wrong side of the company boardroom.

Find Out More