Tax rules pushing Australian startup founders to relocate overseas
Australian founders face pressure to relocate their companies overseas sooner rather than later due to tax complications.
Australian startups with global goals may move overseas earlier than they'd like, startup leaders say. As companies grow and gain value, the process becomes harder.
One common route is a Delaware flip. A new US parent company sits above an existing Australian operation.
Moving early means fewer shareholders and simpler rights to untangle. But getting the tax treatment wrong can be very expensive.
A restructure can trigger phantom tax. A founder faces a capital gains tax bill even though they haven't received cash or exited their investment.
Startup lawyer Richard Pringle sees Australian companies making this move every year. He says tax risks push founders to go as early as possible.
The trend works against Australia's goal to keep innovative businesses at home.
- Richard Pringle at Viridian Lawyers
- Lawyer
- Around a quarter of Pringle's clients
- US investor clients
- Delaware
- Common destination
Why it mattersAustralian tax rules may push the founders and companies we want to keep to move. The local startup ecosystem pays the cost.
AustraliaAustralia risks losing growing startups and their jobs to overseas relocation because tax rules make staying complicated and expensive as the business scales.
✓ Claims checked against the source and corrected before publish. checked 47 min ago
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