Small Business Venture Capital Tax Credit Program
Highlights
This program is designed for businesses like yours, offering a unique opportunity to raise equity capital. By participating, you can access a non-refundable tax credit of up to 45% for individuals and corporations who invest in your business. This can significantly reduce the cost of raising funds and make your business more attractive to investors.
Why apply?
- Substantial Tax Credit: Up to 45% non-refundable tax credit.
- Attract High Net Worth Investors: Minimum investment of $10,000 per investor.
- Lifetime Limit: Issue up to $10 million in shares.
What's in it for you?
- Enhanced Financing Options: Easier to attract substantial investments.
- Growth Potential: Use the funds to expand operations, hire more staff, or invest in new projects.
- Competitive Edge: Stand out to investors with the added benefit of a tax credit.
Qualifying for this program is straightforward, making it an excellent opportunity to secure the financing you need to grow your business.
Financing Details
Type of Financing:
- Tax Credit: The program offers a non-refundable Manitoba tax credit of up to 45%.
Eligible Expenses:
- Equity Capital: The tax credit is available to individuals and corporations who acquire equity capital in eligible Manitoba enterprises.
Use of Funds:
- Eligible Uses: The funds can be used to raise equity from higher net worth individuals.
- Ineligible Uses: The funds cannot be used for purposes outside of acquiring equity capital in eligible Manitoba enterprises.
Repayment Terms and Interest Rates:
- No Repayment: Since this is a tax credit, there are no repayment terms or interest rates associated with the financing.
Fees:
- No Fees: There are no fees associated with this tax credit program.
Qualifications
- Must be a Canadian Controlled Private Corporation (CCPC) with a permanent establishment in Manitoba.
- Assets must be used in active business.
- Revenue must be generated from active business.
- Must have at least $25,000 cash equity already invested.
- Must be a small business with:
- Annual revenue less than $15 million; or
- Less than 100 full-time equivalent employees.
- At least 25% of employees must reside in Manitoba.
Must not be a Reporting Issuer.
Disqualifications:
- Businesses that are Reporting Issuers.
Description
This program offers a non-refundable tax credit of up to 45% for individuals and corporations who invest in eligible Manitoba businesses. If your business is approved, you can issue shares to investors, making it easier to raise capital.
Investors can invest up to $500,000 per company, and your business can issue shares up to a lifetime limit of $10 million. This means you can attract significant investment to grow and expand your operations.
The funds raised can be used for various business activities, such as expanding your product line, hiring more staff, or improving your facilities. This program is a great way to secure the capital you need while offering a substantial tax incentive to your investors.
Program Steps
Prepare Required Documentation:
- Business Plan
- Financial Statements
- Proof of Canadian Controlled Private Corporation (CCPC) status
- Proof of permanent establishment in Manitoba
- Evidence of at least $25,000 cash equity already invested
- Employee records showing at least 25% of employees reside in Manitoba
- Revenue and asset documentation
Complete the Application Form:
- Download the application form from the program's website.
- Fill out all required fields accurately.
Gather Investor Information:
- Ensure each investor meets the minimum investment requirement of $10,000.
- Collect necessary investor details for the application.
Submit Application:
- Send the completed application form and all required documentation to the Economic Programs Branch.
- Address: 1010 - 259 Portage Avenue, Winnipeg, MB R3B 3P4
- Email: [email protected]
Await Pre-Approval:
- The Economic Programs Branch will review your application.
- They will notify you if your corporation is pre-approved to issue shares.
Issue Shares:
- Once pre-approved, proceed to issue shares to investors.
- Ensure all transactions comply with the program guidelines.
Report Issuance:
- Submit a report of the issued shares to the Economic Programs Branch.
- Include details of the investors and the amount invested.
Claim Tax Credit:
- Investors can claim their tax credit on their Manitoba tax return.
- Ensure all necessary documentation is provided to investors for their tax filings.