Eligibility for Companies

 

An early stage company that meets both the following can qualify as an ESIC®

  • the Early Stage Test and

  • either the 100-point Innovation Test or the Principles-based Innovation Test. 

 

Visit our business solutions partner  for further information on what ESICs are. 

 has developed an initial screening tool, called the ESIC Predictor, to assist companies to determine whether they can qualify as an ESIC®.  

 

EARLY STAGE TEST REQUIREMENTS 

To meet the early stage test, the company must meet four requirements:

  • The company must have been incorporated or registered in the Australian Business Register

  • The company (plus any wholly-owned subsidiaries of the company) must have total expenses of $1 million or less in the previous income year

  • The company (plus any wholly-owned subsidiaries of the company) must have assessable income of $200,000 or less in the previous income year

  • The company's equity interests are not listed for quotation in the official list of any stock exchange, either in Australia or a foreign country

 

These requirements must be tested at the point in time immediately after the company issues the shares to the investor. Otherwise, the investor won't qualify for the tax incentives.

 

100-POINT INNOVATION TEST REQUIREMENTS 

To qualify under the 100-point innovation test, the company must obtain at least 100 points by meeting certain criteria listed in the 100-point innovation test.

 

PRINCIPLES-BASED INNOVATION TEST 

To qualify under the principles-based innovation test, the company must meet five requirements:

  • The company must be genuinely focused on developing one or more new or significantly improved innovations for commercialisation

  • The business relating to that innovation must have a high growth potential

  • The company must demonstrate that it has the potential to be able to successfully scale up that business

  • The company must demonstrate that it has the potential to be able to address a broader than local market, including global markets, through that business.

  • The company must demonstrate that it has the potential to be able to have competitive advantages for that business.

 

All the tests must be tested immediately after the new shares are issued to the investor.

Click here for more details.