Employment and Investment Incentive Scheme
- Employment and Investment Incentive Scheme
- Seed Capital Relief
- Film Scheme – Companies and Individuals
An assessment will be carried out as to how the Employment and
Investment Incentive Scheme can be enhanced in light of the
impact of the current crisis with a particular focus on improved
support for start-ups, the potential to attract capital from a broader
range of investors and the potential to include energy-efficient
projects within the remit of the scheme.
Currently the Employment and Investment Incentive Scheme (EIIS)
replaces the previous Business Expansion Scheme (BES). It
significantly broadens the scope of the scheme as many “qualifying
trade” limitations have been removed and thus is available to the
majority of SME trading companies, most of which qualify except for:
• Financing activities
• Dealing in or developing land
• Operating or managing nursing homes and hotels
• Extension of a nursing home or residential care units
associated with a nursing home owned by a company.
• Professional service companies
• The operation of hotels, guest houses and self-catering
accommodation is a “qualifying activity” where the conditions
of the Tourist Traffic Act are met.
The lifetime limit that a company can raise is €15m with the
annual amount being €5m.
An individual may invest up to €150,000 per annum. The
maximum limit applies separately to both spouses, provided that
they both have sufficient income in their own right. Where full
relief cannot be availed of in a tax year, the excess can be carried
forward to subsequent years.
A clawback of relief will arise if shares are disposed of within four
Tax relief for subscriptions for eligible shares has been reduced as
Year 1 relief: 30/40 of the amount invested at the marginal rate
of income tax
Year 4 relief: 10/40 of the amount invested at the marginal rate
of income tax
The company must be unquoted at the beginning of the holding
period and either resident in the State or, if resident in an EEA
State other than Ireland, it must carry on business through a
branch or an agency in the State and carry on relevant trading
activities from a fixed place of business. A full list of the qualifying
criteria can be provided by your advisor.
Following a change in Finance Act 2017, it is no longer possible for
persons with a close connection with a company raising EII
finance to also claim EII relief themselves. However, this has been
relaxed a little in Finance Act 2018 with the introduction of a
variation on the EII called the Startup Capital Incentive (“SCI”).
Under SCI, associates of the founder can claim relief from monies
invested in an early stage start p company. Unlike EII, there is a
maximum lifetime limit of €500,000 for SCI.
The scheme has been extended to 31 December 2021.
Prior to the significant EII changes in Finance Act 2018, there had
been difficulties getting the necessary “advance approval” from
Revenue for investments made by individuals. The changes are
largely designed to improve that particularly with the introduction
of a “self-certification” mechanism.
There have been further changes in Finance Act 2019. With effect
from 9 October 2019, full EII relief is now available in the year of
investment (rather than the current 30/40 and 10/40 mentioned
above). Also, from 1 January 2020, the annual investor investment
limit increases to either €250,000 (from €150,000) or, if the
investor agrees to hold the shares for at least seven