About this programme
The Early Stage Venture Capital Limited Partnership (ESVCLP) program is a tax incentive structure for venture capital funds investing in early-stage Australian businesses. It is not a grant — no cash is paid to a fund or a startup. Instead, a partnership that registers as an ESVCLP gives its investors flow-through tax treatment: investors are exempt from income tax on their share of income and capital gains from eligible venture capital investments, and limited partners can also claim a non-refundable, carry-forward tax offset of up to 10% of their eligible contributions to the fund.
The program is administered jointly by Innovation and Science Australia's Innovation Investment Committee, the Department of Industry, Science and Resources, and the Australian Taxation Office. Registration sits with Innovation and Science Australia under the Venture Capital Act 2002; the ATO applies the resulting tax treatment once a fund is registered.
ESVCLP status is aimed at fund managers raising a new venture capital fund, not directly at the startups the fund later invests in — a founder cannot apply for ESVCLP status themselves. A founder's practical interest is usually indirect: raising capital from an ESVCLP-registered fund, or from an investor who benefits from the ESVCLP tax offset, can make that capital more attractive to the investor than an equivalent non-ESVCLP round.
The program targets pre-seed, seed, startup and early-expansion stage investing. A registered fund must invest within defined limits on committed capital and on the size of the businesses it invests in, and must hold each investment for a minimum period before the tax exemption applies to any gain on disposal.
How it works
A venture capital fund manager forms a new limited partnership (or incorporated limited partnership) and applies to Innovation and Science Australia's Innovation Investment Committee for registration as an ESVCLP under the Venture Capital Act 2002.
The partnership must have committed capital of between $10 million and $200 million (this cap is scheduled to rise to $270 million from 1 July 2027 as announced in the 2026–27 Federal Budget). The partnership agreement must run for between 5 and 15 years.
A fund that does not yet meet all requirements — for example, because it is still raising capital — can receive conditional registration. A conditionally registered fund has 24 months to raise its committed capital and meet the full requirements, after which conditional registration lapses if it has not converted to full registration. The tax exemption on gains only applies once a fund holds full registration.
Once registered, the fund's eligible venture capital investments (EVCIs) must sit within an investee asset cap of $50 million at the time of investment (rising to $80 million from 1 July 2027), and the fund's overall tax exemption is capped at $250 million of value (rising to $420 million from 1 July 2027). Investments must generally be held for a minimum of 12 months for the exemption to apply on disposal.
General partners may be entitled to treat carried interest on capital account rather than revenue account in some circumstances, which affects how that income is taxed.
Who can apply
The applicant must be a new limited partnership or incorporated limited partnership — an existing partnership that has simply been restructured does not qualify.
The partnership (or each general partner, where there is more than one) must be established, or have its general partner resident, in Australia or in a country that has a double tax agreement with Australia.
Unlike the related Venture Capital Limited Partnership (VCLP) program, ESVCLP tax incentives are open to both foreign and Australian-resident investors acting as limited partners; the general partner must be Australian-resident or resident of a double tax agreement country.
Banks, life insurers, superannuation funds and foreign venture capital funds may each contribute up to 100% of a fund's committed capital as a limited partner. Other classes of investor are capped at 30% of committed capital unless the Innovation Investment Committee approves a higher contribution.
The partnership agreement must commit the fund to a term of 5 to 15 years, require capital contributions from partners when called, and prohibit adding new partners or increasing committed capital beyond what the agreement allows.
How to apply
- Prepare the partnership: form a new limited partnership or incorporated limited partnership with a signed partnership deed and an investment plan that demonstrates an early-stage venture capital focus.
- Complete the online ESVCLP application form on business.gov.au. Applications can be lodged at any time and there is no application fee.
- Submit supporting documentation with the application, including the partnership/incorporated limited partnership certificate, the signed partnership deed, the investment plan, limited partner details and evidence of committed capital, and any information memorandum or public offer document used to raise capital.
- The Innovation Investment Committee reviews applications and meets roughly every five weeks. A decision is required within 60 days of a complete application being received, extendable by Innovation and Science Australia for a further 60 days (120 days total) if needed.
- A fund that does not yet meet all registration requirements may be offered conditional registration instead of an outright refusal, with up to 24 months to meet the remaining requirements before the conditional registration lapses.
Documents you’ll typically need
- Limited partnership or incorporated limited partnership registration certificate
- Signed partnership deed, including the fund's investment plan
- Investment plan demonstrating an early-stage venture capital investment strategy
- Limited partner details and evidence of committed capital
- Information memorandum or other public offer document used to raise capital from investors
- Key personnel CVs and details of their time commitment to the fund
Frequently asked
What tax benefit does ESVCLP registration actually give investors?
Limited partners in a registered ESVCLP are exempt from income tax on their share of income and capital gains the fund makes from eligible venture capital investments, including on disposal of those investments. Limited partners can also claim a non-refundable, carry-forward tax offset of up to 10% of their eligible contributions to the fund.
Can a startup apply for ESVCLP funding directly?
No. ESVCLP is a registration status for a venture capital fund and its investors, not a grant program a startup applies to. A startup's route in is being invested in by a fund that holds (or is seeking) ESVCLP registration, or being backed by an investor who benefits from the associated tax offset.
How big can an ESVCLP fund be?
A registered ESVCLP must have committed capital of between $10 million and $200 million. The 2026–27 Federal Budget announced this cap will rise to $270 million from 1 July 2027, alongside increases to the investee asset cap ($50 million rising to $80 million) and the tax exemption cap ($250 million rising to $420 million).
Is there a deadline to apply for ESVCLP registration?
No. Applications can be lodged at any time and there is no application fee. The Innovation Investment Committee reviews applications on an ongoing basis, meeting roughly every five weeks, and must decide within 60 days of receiving a complete application (extendable to 120 days).
What happens if a fund doesn't meet all the requirements when it applies?
A fund that is still raising capital or does not yet meet every requirement can be granted conditional registration. It then has 24 months to meet the full requirements and convert to full registration; the tax exemption on investment gains only applies once the fund holds full registration.
Are foreign investors eligible for the ESVCLP tax offset?
Yes. Unlike the related VCLP program, ESVCLP tax incentives are available to both Australian-resident and foreign limited partners. The general partner, however, must be an Australian resident or resident of a country with a double tax agreement with Australia.
Who administers the ESVCLP program?
Registration is decided by Innovation and Science Australia's Innovation Investment Committee under the Venture Capital Act 2002. The Department of Industry, Science and Resources and the Australian Taxation Office jointly administer the program, with the ATO applying the resulting tax treatment.
Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.