Latest / Early Edition with Ryan Bridge / Mahesh Muralidhar: Phase One Ventures CEO on the changes to the Foreign Investment Fund

Transcript

Mahesh Muralidhar: Phase One Ventures CEO on the changes to the Foreign Investment Fund · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Right. The government's proposing tax changes to make things easier
• 0:03
  Speaker 1: for foreign investors starting new businesses in New Zealand. So
• 0:06
  Speaker 1: countless tech companies choose to leave early into their business
• 0:09
  Speaker 1: life or they relocate to start in the first place
• 0:13
  Speaker 1: because they feel that conditions are better overseas and there's
• 0:16
  Speaker 1: more chance for growth. So these changes I hope to
• 0:18
  Speaker 1: make it easier for them to start up, but they're
• 0:21
  Speaker 1: most critically to stay and then grow. So Phase one
• 0:24
  Speaker 1: Ventures CEO Mahesh modernly Da is joining me this morning,
• 0:28
  Speaker 1: Helen Mahet, Good morning, Andrew. So how will these changes
• 0:32
  Speaker 1: help tech startups like yourself?
• 0:34
  Speaker 2: Yeah, So the change is that Revenue Minister from what
• 0:40
  Speaker 2: has suggested is a change on rules that allow foreigners
• 0:46
  Speaker 2: to come in and also returning quees like myself to
• 0:49
  Speaker 2: come back home and make sure that out the unrealized
• 0:53
  Speaker 2: assets it overseas aren't taxed. So in Australia, US, United Kingdom,
• 1:01
  Speaker 2: Hong Kong, Singapore, when someone has unrealized gains like equity
• 1:06
  Speaker 2: in a startup, equity in your startup that you built,
• 1:10
  Speaker 2: it doesn't get tacked until it's realized. In New Zealand
• 1:13
  Speaker 2: right now, it gets packed even if it's not liquid.
• 1:18
  Speaker 2: This prevents people who've done these school things and have
• 1:22
  Speaker 2: all of these skills from coming to New Zealand or
• 1:25
  Speaker 2: coming back home returning quies too, because they're going to
• 1:29
  Speaker 2: get tacked on cash that they don't have.
• 1:31
  Speaker 1: Of course, there's a bit of a no brainer. Really,
• 1:33
  Speaker 1: you can't get text until you're making a profit. Meanwhile,
• 1:35
  Speaker 1: you're trying to finance yourself and keep yourself going while
• 1:37
  Speaker 1: you build the business. So that's a good thing. But
• 1:39
  Speaker 1: is there anything they missed? Would you have liked to
• 1:42
  Speaker 1: have seen more in the announcement?
• 1:44
  Speaker 2: So I think there's an opportunity to no. I think
• 1:48
  Speaker 2: first of all, this is fantastic, right, like we're coming
• 1:51
  Speaker 2: up to turn with international based practice. One of the
• 1:55
  Speaker 2: biggest reasons I was one of the first guys at Canvas.
• 1:58
  Speaker 2: One of the biggest benefits for us at Camera at
• 2:01
  Speaker 2: Sydney was when Google Sydney set up shop in Sydney,
• 2:05
  Speaker 2: and they wouldn't have set up shop if they had
• 2:07
  Speaker 2: these kind of rules. So this allows for overseas investment
• 2:11
  Speaker 2: to come in, stay and go, and then it's that
• 2:14
  Speaker 2: skills transfer from these people to our entrepreners who are
• 2:18
  Speaker 2: trying to do stuff and scale. There's an opportunity to
• 2:22
  Speaker 2: consider if we can extend this to everyone, so it
• 2:27
  Speaker 2: allows more and more FEU to look up and start
• 2:30
  Speaker 2: investing and playing a global game, which is nearly the
• 2:33
  Speaker 2: number one thing we have to do to become more productive.
• 2:36
  Speaker 2: And finally, just set this up with international standards.
• 2:41
  Speaker 1: Yes, well, you've talked about how you've come back to
• 2:43
  Speaker 1: New Zealand and about how other New Zealand entrepreneurs have
• 2:46
  Speaker 1: come back because you have faith in the country, and
• 2:48
  Speaker 1: now you've got some rules that are going to help
• 2:50
  Speaker 1: you as well. But what I want to know is
• 2:52
  Speaker 1: how common it is for companies to actually leave New
• 2:55
  Speaker 1: Zealand having done the hard yards, having started up, but
• 2:58
  Speaker 1: then leave because of the foreign Investment fund rules as
• 3:01
  Speaker 1: they stand.
• 3:02
  Speaker 2: Yeah, so why do why do companies leave? Companies leave
• 3:05
  Speaker 2: because one they want to get talent from overseas and
• 3:10
  Speaker 2: two because they want to access capital. Look, the largest
• 3:14
  Speaker 2: capital market in the world easily and the best is
• 3:18
  Speaker 2: the US. There are so many Americans who want to
• 3:21
  Speaker 2: be in New Zealand. So can we get more of
• 3:24
  Speaker 2: our tech companies staying here for their first four to
• 3:28
  Speaker 2: five years and once you stay four to five years.
• 3:30
  Speaker 2: You're you're locked in, right, so will they will there
• 3:34
  Speaker 2: their chance that they belonging. Yes, an opportunity for the
• 3:38
  Speaker 2: government to extend things further, and financialist nicols to talk
• 3:42
  Speaker 2: about this is reducing corporate tax, but not that alone.
• 3:45
  Speaker 2: Maybe even reduce income from your first over these five
• 3:51
  Speaker 2: hundred thousand dollars made overseas or something along those lines,
• 3:54
  Speaker 2: which then trigger entrepreneurs to like, make that overseas dollars
• 3:58
  Speaker 2: stay here longer.
• 4:00
  Speaker 1: I thank you so much for your time today, Mahesh Morerida,
• 4:02
  Speaker 1: who is Phase one Ventures CEO.
• 4:05
  Speaker 2: For more from Early edition with Ryan Bridge, Listen live
• 4:09
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• 4:12
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