‘Moving their entire families’: Tech founders say mass exodus from Australia to the US is brewing

Exclusive: Australian tech bosses say a mass exodus of founders to the US is brewing, months after warning that axing the capital gains tax (CGT) discount would be the final nail in the coffin for ambitious entrepreneurs.

In the nearly five months since the May federal budget’s sweeping tax policies were announced, local start-up founders say the wind is beginning to change.

San Francisco’s Silicon Valley and Singapore are the most attractive locations for Australian entrepreneurs, according to Firmable co-founder and tech investor Leigh Jasper.

Jasper recently spent time in San Francisco at a symposium of Australian founders.

He told nine.com.au there was a concerning theme among expats living in the US.

“CGT changes were mentioned in almost every conversation I had with founders who have decided to leave Australia,” Jasper said.

“It’s not the sole reason founders are moving, but it is the straw that broke the camel’s back for many, so to speak.“

Australia’s incoming CGT framework will push the country’s tax rates to among the highest in the world.

A minimum 30 per cent rate will be introduced for tax paid on the sale of an asset, including a business, from July 1.

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Singapore does not impose a capital gains tax.

In the US, CGT is applied at a lower blended rate – long-term gains are taxed at either zero per cent, 15 per cent or 20 per cent, depending on income and tax status.

Short-term capitals gains are taxed according to individual incomes.

“Capital is mobile. Why would you stay somewhere where you had to pay 47 per cent tax if you sold your business, when the US is closer to our old rate, and there’s zero CGT in Singapore and New Zealand?” Jasper added.

Sam Senior is the founder and chief executive of AI platform Monarch.

Senior founded his business in Queensland but now splits his time between Australia and the US, chiefly working out of San Francisco.

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He told nine.com.au he has spoken to several Australian business owners and staffers who are “seriously looking at moving their entire families” to the US.

 “I’ve had everyone from very young people to senior partners at consulting firms talking to me about moving to San Francisco,” Senior said.

“They’re excited about AI and want to get involved. They want to jam with people, try things and feel like they’re part of what’s happening at the very cutting edge.

“And they’re frustrated with Australia: how slowly things move, how conservative we are and how hard it can be to get people to think beyond the next quarter.”

Senior said there is already a slang term for the great Aussie migration to California: the Aussie mafia.

According to the US Census Bureau, around 7000 Australians live in the Bay Area.

And these ambitious, tech-hungry expats want to live and breathe entrepreneurialism – a culture that Senior warns is rapidly fading back home.

“Australia doesn’t need to give founders more reasons to leave,” Senior added.

“There is already talent density, customers, capital, and an appetite for risk pulling you over there.

“There are already plenty of reasons why a founder might move from Australia to the US.

“Capital gains tax changes aren’t the number one reason, but they’re just another massive incentive that the US now has over being a founder in Australia.”

CGT carve-outs were offered to small businesses, founders, employees and early investors in start-up companies in June.

Under the current proposal, the discount will only apply to those with an annual turnover of up to $10 million.

Senior expects this won’t be a very appealing exemption for Aussie founders shooting for the moon.

Australian start-up Canva, for example, hit a revenue of over $5.6 billion in 2026.

“Imagine if Canva had been set up in the US from the start,” he said.

“All that wealth creation would happen offshore.”