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Venture Capital Companies: a birds-eye view


2021-04-28

Venture Capital Companies

The 2008 Budget Review identified the challenges faced by small and medium-sized businesses in accessing equity finance i.e., the acquisition of finance by way of the issue of shares to investors. As the cost of share investments held on capital account is ordinarily not deductible, a tax incentive in the form of section 12J was enacted to encourage equity investment through venture capital companies (“VCCs”) in small and medium-sized business as well as junior mining companies. Provided certain requirements are met, an investor may obtain a 100% deduction for the cost of shares subscribed for in a VCC.

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