Section 12J of the Income Tax Act was created specifically to encourage taxpayers to invest in small and medium sized enterprises in the Republic of South Africa.
Taxpayers who invest in a registered Venture Capital Company (VCC) are entitled to a 100% tax deduction on monies invested, thereby achieving an immediate return of up to 41% for individuals and trusts, and 28% for companies (being the reduction in marginal taxes payable) on their investment.
Furthermore, recent changes to the BEE codes have placed a greater emphasis on the ownership of BEE-qualifying individuals; this will likely stimulate demand for BEE-compliant capital in SMME’s seeking to improve their BEE status.
Taken together, these developments create an opportunity for a fund of BEE-compliant investors to provide their sought-after capital, while taking advantage of the tax incentives provided by Section 12J in this regard
Who We Are
A Diverse Team
We are a diverse team of financial experts, entrepreneurs, corporate and investment management team that has been structured to serve our investments partners and investee companies to maximize returns.
To identify and invest in small to medium sized companies – particularly those seeking to improve their BEE status - where there exists a realistic prospect that, through a management intervention and capitalisation process, the target company is expected to return a net profit after tax (NPAT) of 25% on funds invested within a period of three years.
Investments in Iridium should be seen as medium to long term investments of a high risk nature. It is intended that the investment in Iridium will have an investment horizon of 5 to 7 years.
The equity of any of the Qualifying Companies may be listed on a stock exchange or a trade sale to realise Iridium’s investment.
Where appropriate Iridium will exit the Qualifying Company by disposing of shares for capital gain, whether by outright sale or management buy in.
The Iridium Team together with Hobbs Sinclair will utilise their invaluable experience in performing a management intervention, where necessary, in Qualifying Companies to facilitate the restructuring and future management of the companies. This ensures that adequate controls and reporting structures are implemented in Qualifying Companies as required by the Investment Committee.