Employment Incentive and Investment Scheme & Seed Capital Scheme

Overview of the Employment Incentive and Investment Scheme
Am I eligible?
Seed Capital Scheme
Key contact/more information

Overview of the Employment Incentive and Investment Scheme

The Employment & Investment Incentive (EII) allows individual investors to obtain income tax relief on investments made, in each tax year, into EII certified qualifying companies. The EII replaces the Business Expansion Scheme (BES) and EII will run until 2020. 

Companies seeking EII relief must directly seek certification from the Revenue Commissioners. EI has no role in the certification process. 

EII relief is given under Article 21 of GBER and now requires EII funding to meet the following requirements: 

Eligible undertakings shall be undertakings which at the time of the initial risk finance investment are unlisted SMEs and fulfil at least one of the following conditions: 

  • they have not been operating in any market
  • they have been operating in any market for less than 7 years following their first commercial sale 

The cumulation limit on EII investment is now €15m as defined under the GBER.  The cumulation rules set out in the GBER may apply to other State Aid received by the undertaking where the total State Aid received by the undertaking exceeds €15m.

Am I eligible?

The EII is open to the majority of SMEs However, the following trading activities will not be eligible for the scheme:

• Adventures or concerns in the nature of trade
• Dealing in commodities or futures in shares, securities or other financial assets
• Financing activities
• Professional service companies
• Dealing in or developing land
• Forestry
• Operating or managing hotels, guest houses, self catering accommodation or comparable establishments or managing property used as a hotel, guest house, self catering accommodation or comparable establishment
• Operating or managing nursing homes or residential care homes or managing property used as a nursing home or residential care home
• Operations carried on in the coal industry or in the steel and shipbuilding sectors
• The production of a film (within the meaning of section 481)

Overview of Seed Capital Scheme

If you are an employee, an unemployed person or were made redundant recently and are interested in starting your own business you may be entitled to avail of the tax refund available under the Seed Capital Scheme. An employee who leaves employment and invests by means of shares in a qualifying new venture, may claim a refund of income tax paid in previous years. An unemployed person may also avail of this facility.

In the past Enterprise Ireland had a certification role in validating business propositions that could avail of this scheme. This is no longer the case. For further information please refer to the Seed Capital Scheme - Tax Refunds for New Enterprises (PDF format).

Key contact/more information?

Further details and information can be found on the Revenue Commissioners website, For information on raising equity capital from private investors, go to our Sources of Equity Section.

Note regarding cumulation of State Aid:

With effect from 1st January 2007, a company that raises capital under the BES or the Enterprise Incentive Investment (EII) Scheme will have to reduce other State-aids (with the exception of schemes approved under the R&D and Innovation State-aid framework). A State agency (including Enterprise Ireland) on application to it, by a BES or EII capitalised company, may be required to reduce

  • by 50% in the “non-assisted” areas and
  • by 20% in the rest of Ireland -

The maximum aid intensity (i.e. the percentage level of support) or maximum eligible amounts available, under that agency’s State-aided schemes, to such a company during the first three years of its total BES and/or EII capitalisation, effective from the date of its first BES and/or EII share-issue. If the amount of the reduction resulting from this calculation is greater than the value of the BES and/or EII investments, then, in such cases, the maximum amount to be deducted will be equal to the amount of the BES investments.

Your Enterprise Ireland Development Adviser can inform you of any impact on funding from Enterprise Ireland if you have raised funding under the BES and/or EII.