🔏Establishing a new VC
https://www.pwc.com.au/legal/assets/establishing-a-new-vc-or-pe-fund.pdf
Venture Capital vs Private equity fund
Fund structure options
The internationally preferred structure is the limited partnership
Options in Australia
Bespoke unit trust
ESVCLP
Venture capital limited partnerships
Unit trusts/Managed Investment trusts (MITs)
Unit trusts/Managed Investment trusts (MITs)
Tax flow-through vehicle
Reduced level of withholding tax
Managed by a Trustee
Reduced level of withholding tax
Withholding tax - refers to the money that an employer deducts from an employee's gross wages and pays directly to the government.
Venture capital limited partnerships (VCLP)
Tax flow-through vehicle
Encourage foreign investment in Australian venture capital
No tax advantage to Australian investors
Must invest in eligible venture capital investments (excludes property development, land ownershup, banking, providing capital to others, leasing, factoring, securitisation, insurance, construction or the acquisition of infrastructure facilities and making passive investments.
Minimum fund size of $10 Million (no restriction on maximum size)
ESVCLP Early stage venture capital limited partners
Income/capital gains from the disposal of eligible venture capital investments are exempt from tax in Australia in the hands of domestic and foreign investors
Tax free incentive to encourage investment in Australian startups/ventures
Approved investment plan
First investment must not exceed $50 Million
Committed capital of a minimum $10 million, not more than $100 million
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