Frank Lab accelerator program gains ESIC eligibility, improving investment appeal of startups

Hall & Wilcox’s startup accelerator Frank Lab has gained Early Stage Innovation Company (ESIC) eligibility through a private ruling by the Australian Taxation Office (ATO).

By participating in the Frank Lab program, companies will receive 50 points of the 100 points required to qualify as an ESIC.

Investors in eligible startups receive significant tax incentives, such as an immediate tax offset or rebate equal to 20% of their investment, capped at $200,000 in each income year, and can access modified capital gains tax treatment for their shareholding.

Jasmine Koh and James Bull, who head up the Frank practice, said, ‘We are very pleased to see that participating startups in Frank Lab are set to benefit from our program’s new ESIC-eligible status. Qualifying ESIC participants in the Frank Lab accelerator will now be able to attract greater investment through investor-friendly tax incentives.’

‘While our wishlist would include an increase in the rebate and the cap, startups that qualify as an ESIC still offer investors sizeable tax advantages, which can make them very appealing,’ explained Jasmine.

In addition to the 100 points, startups must also meet the ATO’s four early-stage test requirements to qualify as an ESIC. The company must be incorporated or registered through the Australian Business Register; have an assessable income of $200,000 or less in the previous year; have total expenses of A$1 million or less in the previous income year; and not be listed on any stock exchange.

Applications for the upcoming Frank Lab program are open until 24 January. The first six-month program for the year kicks off on 1 March.

About Frank Lab

Frank Lab, Hall & Wilcox’s accelerator program for emerging businesses, provides legal support and networking opportunities to help selected startups grow their business. As part of the program, successful applicants receive credits to spend on legal services and get to work with an experienced lawyer as their own trusted advisor for the duration of the program. They also receive access to Hall & Wilcox office space nationally and the firm’s Smarter Law technology solutions.