An Early stage venture capital limited partnership (ESVCLP) is a venture capital fund structured as a limited partnership that makes equity investments in eligible Australian start-up and growth companies.
Under the program, a fund manager can raise an early stage venture capital fund that pools investors' capital and applies to AusIndustry to register the fund as an ESVCLP.
An ESVCLP is entitled to flow-through tax treatment, and in general, its investors are exempt from income tax on their share of returns (income or capital) when an ESVCLP disposes of an eligible venture capital investment (EVCI) and on any other income earned from the EVCI such as dividends. Unlike for a VCLP, these incentives are available to:
- both foreign and Australian resident investors who are limited partners in the ESVCLP
- general partners who are Australian resident or resident of a country that has a double tax agreement with Australia.
Innovation Australia administers the ESVCLP program. Similar to VCLPs, for the tax benefits to apply, the ESVCLP must be registered and remain registered.
An ESVCLP must meet the registration requirements for VCLPs and some additional and altered requirements including the following:
- The partnership must have between $10 million and $200 million committed capital.
- Investments made by the partnership must be in accordance with an approved investment plan.
- The investee entity is not listed when the partnership makes its first investment in the entity.
- Any investments acquired from existing investors must add to an investment already held in the entity or issued in connection with that acquisition, and which in total do not exceed 20% of the partnership's committed capital.
- The total asset value of the investee entity before the investment is made is not more than $50 million.
For eligibility and registration enquiries, you can:
- contact AusIndustry by phone on 13 28 46
- email VentureCapital@industry.gov.au
- visit business.gov.au – grants and programsExternal Link