What is a 708 sophisticated investor?

A sophisticated investor is a category of investor defined under section 708(8) of the Corporations Act 2001 (Cth). This classification allows them to participate in certain investment opportunities that are typically not available to retail investors, such as unregistered managed investment schemes and private capital raisings.

How Does Someone Qualify as a Sophisticated Investor?

An investor is considered sophisticated if they meet at least one of these criteria:

1. Net Assets Test – They have net assets of at least AUD 2.5 million; or
2. Income Test – They have earned at least AUD 250,000 per year in gross income for the past two consecutive financial years.

To prove this status, they need a certificate from a qualified accountant, which remains valid for two years.