Wednesday 14th October 2015
Spurring Investment in Small Business through Approved Venture Capital Companies
Tax Breaks - SARS Incentive Available Until June 30,
2021
Window of Opportunity Explained by Venture Capital Specialist
& Business Rescue Practitioner Neill Hobbs – CA (SA)Most approved venture capital companies in SA are looking to invest in existing businesses.
THE number of venture capital companies approved by the South African Revenue Service (SARS) to take advantage of a venture capital tax incentive has increased to 19, following amendments to tax legislation that took effect in April 2015. The incentive was introduced in 2009 by the National Treasury in terms of section 12J of the Income Tax Act to spur investments in small businesses through approved venture capital companies.
However, because of the onerous criteria, there was initially limited interest. By August 2013 only one small business had benefited from an investment using the new tax regime.
April 2015 Attractive Tax Incentive – Higher Investee Asset Threshold
Recent amendments to tax legislation regarding venture capital tax breaks that took effect in April 2015 have made the tax incentive more attractive, allowing for a higher investee asset threshold (R50m for qualifying small businesses and R300m for junior mining companies) AND a permanent investment deduction.
Most of the approved funds are still in the capital-raising period. While there may have been hopes the incentive would encourage investment in start-ups and high-impact firms, most approved venture capital companies in SA are looking to invest in existing businesses.
Hobbs Sinclair Has Three Venture Capital Companies
Hobbs is also a business rescue practitioner and had been involved in keeping Mastercare afloat when its bank was keen on liquidating it after a troubled merger with TV repair business Early Bird.
Saving Jobs after Banks Refuse Overdraft Requests
Mastercare managing director Wesley Rabie says the investment helped save at least 100 jobs. Hobbs says Redwood is preparing to invest in a second company, in the medical sector, after its bank had refused an overdraft request. SA Venture Capital Association chairwoman Erika van der Merwe says the SARS incentive was set up to direct investment and skills development towards small business in general — regardless of whether they are start-ups.
SARS spokesman Luther Lebelo says approved venture capital
companies plan to focus on start-ups and existing small businesses.
The provisions of the tax regime provide a vehicle for a wide range of investments and the level of risk is limited by what the investors "are prepared to accept".
Attend this @CoworkingJHB Guest Speaker Event at 18h00 on Wednesday Evening, 14th October 2015
Guest Speaker: Neill Hobbs CA (SA)
Neill Hobbs is the founding member of Hobbs Sinclair and has been in
public practice for over 20 years. Apart from his broad experience in financial
strategy, he has managed a number of privately and publicly held corporations,
and holds directorships in several companies. A business analyst by nature,
Neill has experience in the area of corporate finance and capital markets and
is a Senior Business Rescue Practitioner. Neill is a family man, who has a
passion for music, military history and his faith. Neill is a member of the
South African Institute of Chartered Accountants (SAICA)
·
Registered
member Independent Regulatory Board for Auditors (IRBA)
·
Registered Tax
Practitioner with SARS
·
Member of South
African Restructuring and Insolvency Practitioners Association (SARIPA)
Networking, Drinks and Snacks Served Post Event
RSVP by emailing your acceptance and names and number of attendees to:
Gail Mingard
CoworkingJhb@outlook.com
Follow @CoworkingJHB on Twitter
Hackle Brooke Conference Centre
110 Conrad Drive, Craighall, Johannesburg
Event Initiated By : Gail Mingard
In the interests of moving South Africa forward to a successful and positive future
Cell: 082 714 8614
