It is common for Australian founders to commence operations in an Australian company with their shareholding held either directly or indirectly via an Australian discretionary trust.
Australian start-ups generally move to the US for the following reasons:
- the significantly larger consumer market; and/or
- the significantly deeper capital pools (in terms of raising equity).
Writing in Thomson Reuters inTAX magazine, James Meli, Director of Tax, Economos, discusses what is a flip-up to the US for Aussie start-ups. A flip-up is where the founders of an Australian company (and any other shareholders such as employees with vested shares and third party investors) swap their shares in the Australian company for the issue of shares in a US company.
Meli discusses specific scenarios and highlights key Australian tax implications noting practical tips and traps for tax practitioners looking to advise their clients who may be considering a flip-up to the US.
Read the full article in Thomson Reuters inTAX magazine (July 2016) or contact your Thomson Reuters representative.
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