Document ID: chunk:federal_register_of_legislation:C2025C00029:section:7:p13
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 7 (pt 13/58)
Character Range: 2331472–2334224

services primarily in Australia;
 (ii) more than 50% of its assets (determined by value) must be situated in Australia;
  during the whole of the period of 12 months, or such shorter period as *Industry Innovation and Science Australia determines under section 25‑5 of the Venture Capital Act 2002, starting from the time the investment is made.
However, subparagraph (b)(i) or (ii) does not apply to the company if Industry Innovation and Science Australia so determines under section 25‑10 of the Venture Capital Act 2002.
See subsection (10) for the value of assets.
Note: A company that fails to meet the requirements of this subsection can still be eligible in certain circumstances: see subsection (12A).

Predominant activity
 (3) The company must satisfy at least 2 of these requirements:
 (a) more than 75% of the assets (determined by value) that are assets of either:
 (i) the company; or
 (ii) any entity controlled by the company in a way described in section 328‑125 (a controlled entity);
  must be used primarily in activities that are not ineligible activities mentioned in subsection (13) of this section;
 (b) more than 75% of the persons who are employees of either or both of the following:
 (i) the company;
 (ii) any one or more of its controlled entities;
  must be engaged (as such employees) primarily in activities that are not ineligible activities mentioned in subsection (13) of this section;
 (c) more than 75% of the total assessable income, *exempt income and *non‑assessable non‑exempt income of:
 (i) the company; and
 (ii) each of its controlled entities;
  must come from activities that are not ineligible activities mentioned in subsection (13) of this section.
Note 1: This requirement is ongoing. It is not limited to the circumstances at the time the investment was made.
Note 2: See subsection (10) for the value of assets.
Note 3: A company that fails to meet at least 2 of the requirements can still be eligible if:
(a) Industry Innovation and Science Australia determines that the company's primary activity is not ineligible and the failure is temporary: see subsection (14); or
(b) all amounts invested in the company are appropriately invested within the first 6 months: see subsection (14A).
 Industry Innovation and Science Australia may also determine that the activities of a controlled entity of the company are to be disregarded in applying this section to the company: see subsection (14B).

Investment in other entities
 (4) The company must not invest, in another entity, any part of the amount invested, unless:
 (a) the other entity:
 (i) is *connected with the company (but not because the other entity is an *associate of the company as a result of an investment made in the other entity by