What is an ESIC?
An Early Stage Innovation Company (“ESIC”) that meets eligibility criteria under Australia’s income tax laws. A good example is an Australian-private company incorporated in recent years. Your company would generally need to be younger than your teenage children.
ESIC Indicators for your company:
- a demonstrated innovation (as contained in a patent, R&D tax registration, accelerator program and such); or
- high-growth potential for a new business offering with the potential to address a broader than local market. Be bold and think global markets.
An ESIC is an Early Stage Innovation Company. In order for a company to qualify as an ESIC it must have high growth potential, be able to scale, address a broader than local market, and have competitive advantages.
The government has recently passed legislation that provides tax incentives for investments in ESICs. Investments in ESICs may be eligible for a 20% tax offset, and gains on the sale of an ESIC investment may be CGT free if shares are held for between 1 to 10 years.
As a business, ESIC status makes you a more attractive investment and lets investors know you are a promising new company. Take our ESIC Predictor Pre-Assessment to see if you may qualify as an ESIC.