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Employment and Investment Incentive Scheme

Employment and Investment Incentive Scheme

The Employment and Investment Incentive Scheme (EIIS) replaces the Business Expansion Scheme (BES). The scheme significantly broadens the scope of the scheme as “qualifying trade” limitations have been removed and the scheme is available to the majority of small and medium sized trading companies, most of whom 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 in this scheme. 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.

The period for which shares need to be held has been increased from three years to four years. A claw-back of relief will arise if shares are disposed of within 4 years.

Tax relief for subscriptions for eligible shares has been reduced as follows:

Year 1 relief: 30/40 of the amount invested

Year 3 relief: 10/40 of the amount invested

The Company must be an unquoted Company throughout the holding period and either be resident in the State, or if 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.

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 up 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


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