What are EIIS Schemes in Ireland?
The Employment and Investment Incentive Scheme (EIIS) is a tax relief scheme in Ireland that was designed to encourage investment in small and medium-sized enterprises (SMEs). It allows individuals who invest in qualifying SMEs to claim tax relief on their investment, provided that certain conditions are met. The scheme is administered by the Irish Revenue Commissioners and is intended to help SMEs raise capital and create jobs. The tax relief available under the EIIS is based on the amount of the investment, with higher rates of relief available for investments in certain sectors, such as manufacturing and tourism. To qualify for the EIIS, the SME must be registered in Ireland and meet certain criteria, including having fewer than 250 employees and an annual turnover of less than €50 million.
What are the main tax incentives/benefits to EIIS schemes to business owners?
The main tax incentives for business owners under the Employment and Investment Incentive Scheme (EIIS) are:
- Tax relief on the investment:
Investors who invest in qualifying SMEs through the EIIS can claim tax relief on their investment, up to a maximum of €150,000 per tax year. The amount of relief is based on the amount of the investment, with higher rates of relief available for investments in certain sectors.
- Capital gains tax (CGT) relief:
If the investment is held for at least three years, investors may be eligible for CGT relief on any gains they make when they sell their investment.
- Income tax relief:
Investors may also be eligible for income tax relief on the income they earn from the investment.
- Corporation tax relief:
Business owners may be eligible for corporation tax relief on the investment, provided that it is made through a trading company and is used for the purposes of the trade.
- Carry-back of losses:
Business owners may be able to carry back losses from the investment against profits in the previous tax year, which can result in a tax refund.
Overall, the EIIS is designed to encourage investment in small and medium-sized enterprises (SMEs) in Ireland, helping them to raise capital and create jobs.
What EIIS schemes are available in Ireland at present?
There are two types of EIIS schemes available in Ireland at present:
- the EIIS Fund and
- the EIIS Direct.
The EIIS Fund
The EIIS Fund allows investors to invest in a fund that, in turn, invests in qualifying SMEs. The fund must be approved by the Revenue Commissioners and must meet certain criteria, including investing at least 70% of its assets in qualifying SMEs.
The EIIS Direct
The EIIS Direct allows investors to invest directly in qualifying SMEs. To qualify for the EIIS Direct, the SME must be registered in Ireland and meet certain criteria, including having fewer than 250 employees and an annual turnover of less than €50 million.
Both the EIIS Fund and the EIIS Direct offer tax relief to investors, provided that certain conditions are met. The specific tax relief available depends on the type of EIIS scheme chosen and the terms of the investment.
What EIIS schemes are available for business owners to invest in presently in Ireland?
There are a number of approved EIIS funds and qualifying SMEs available in Ireland, and business owners can choose the one that best meets their investment objectives and risk profile
Some examples of approved EIIS funds that business owners in Ireland may be able to invest in include:
- Cork-based EIIS fund manager, The Investment Fund for Europe, which focuses on investing in SMEs in the manufacturing, services, and technology sectors
- Dublin-based EIIS fund manager, Bridge Capital Advisors, which invests in a diversified portfolio of SMEs across a range of sectors
- Dublin-based EIIS fund manager, Capital Mind Advisors, which focuses on investing in SMEs in the technology, healthcare, and renewable energy sectors
It is important to carefully research and consider the terms and conditions of any EIIS fund before making an investment. Business owners should also seek independent financial advice to ensure that the investment is suitable for their needs and risk profile.
When investing in EIIS Direct there are many options available. Qualifying SMEs can be found in a range of sectors, including manufacturing, retail, tourism, and technology. Business owners can invest in qualifying SMEs through the EIIS Direct by purchasing shares in the company or by making a loan to the company.
Business owners can find investment opportunities through the EIIS Direct by working with a financial advisor or broker like Money Maximising Advisors to identify the most suitable investment opportunities available in the marketplace.
It is important to carefully research and consider the terms and conditions of any investment in a qualifying SME through the EIIS Direct before making a decision. Independent financial advice is emperitiveto ensure that the investment is suitable for the needs and risk profile of each business owner.
If you would like us to send you some EIIS options via email please click on the link below