Section 12J

Smart, Innovative Investments

SECTION 12J OF THE INCOME TAX ACT

 

EXECUTIVE SUMMARY

This Private Placement Memorandum is an invitation to subscribe for shares in Expatti Limited

(hereafter Expatti) – a registered Venture Capital Company (VCC), registered with the FSB

and SARS in terms of Section 12J Silo of the Income Tax Act.

An investment into a VCC is 100% tax deductible, thereby achieving an immediate return (in reduced

taxes) of up to 45% for individuals and trusts, and 28% for companies.

Minimum investment is R1 000 000, as stipulated in the Companies Act Regulations.

Venture Capital Company is a start-up company, generally a small business who is believed to have long term growth potential.

Venture capital is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Equity finance is a method of raising fresh capital by selling shares of the company to public, institutional investors, or financial institutions. The investors are referred to as shareholders of the company as they have received ownership portions of the company.

 

HOW IT WORKS

Qualifying investors (any taxpayer) invests in approved Venture Capital Companies (hereafter referred to as VCC’s). These VCC’s issue Venture Capital Shares and Investor Certificates.

The investor now has the benefit of claiming a tax deduction in respect of their investment in approved VCC’s. The VCC’s invests in qualifying investee companies who issue qualifying shares to the VCC.

 

HOW DO I INVEST & CLAIM MY SECTION 12J DEDUCTION

By completing the application form provided by Expatti and emailing it to info@expatti.com or completing the subscription form, you mark the beginning of financial growth.

The Expatti team will evaluate your information and provide prospective investment options. Once you’ve assessed the options and made a choice best suited to your needs, the prospectus will be signed and thereby concluded. Followed by your investment payment, a share and 12J Certificate will be issues to you. Upon completing your tax return, the SARS e-filing system will have the following fields to complete:

Have you invested in a Section 12J VCC?

Simply click on ‘YES’ and fill in the amount invested during the tax year in order to get the deduction. Keep your section 12j Certificate on hand as supporting documentation and submit this, should it be required.

 

COST STRUCTURE ON CAPITAL RAISED

Costs involved in the investment consists of a 2.5%, upfront once off fee to your broker. Broker consultants also retain 1.5% per year on the total amount invested.

 

MANAGEMENT AND SUCCESS FEES

2.5% of Issued Share Capital per annum is due. A 20% of dividends is payable, over the course of five years. Take note, this is only applicable to the value of the sum gained, not the investment amount.

 

INVESTMENT STRATEGY AND OBJECTIVES

Investments are sourced by longstanding relationships with a series of field experts, such as developers, auditors, bankers, business associates’ networks, private equity firms and other existing VCC’s and their relationships. Expatti thus prides itself in its reputability and extensive network capabilities, creating the ideal environment for any potential investor to exercise their choice of investment.

Not excluding any viable sectors in the market in terms of investment, Expatti has identified the following sectors as highly profitable, with minimum risk.

Primary: Permissible trades backed by property such as hotel keep, hospitality, student accommodation, health care and elderly care.

Secondary: Permissible trades with synergies to the residential property sector, – private security, renewable energy, maintenance and connectivity.

Expatti | Authorised Financial Service Provider FSP: TBC

A 15% dividend return to investors per annum is targeted, together with maximum capital growth for

exit purposes.

 

EXIT STRATEGY

Investments in VCC’s should be considered medium to long term investments. Should the taxpayer withdraw shares of the VCC within five years of the investment initiation, a pro-rata repudiation of the taxable income will be levied.

Exit strategies in this case would be:

Selling the VCC shares to a new investor

Selling the VCC shares back to the company

Moving into the sixth year of investment, the fund will distribute quarterly dividends at a targeted fifteen percent growth curve per year.

Exiting the fund after the desired five year investment period, the following exit strategies are viable.

Cash sale option – selling your shares back to the fund at the prevailing Net Asset Value.

Retain the property by transferring the title deed to yourself and in so doing, reaping considerable income.

Income option – to remain an investor in the fund and earn a passive income

The above strategies endorse a failsafe, high potential, passive income gateway brought to you by your trusted partner.

EXPATTI
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Investing in high quality, low risk markets, owning your best interest.