EIIS tax relief plan led to €150m of investments in 2018

The State's employment and investment incentive scheme (EIIS), which allows small investors to claim tax relief on investments in emerging companies, has resulted in €150 million being committed to 250 Irish firms this year, according to calculations prepared by investment manager BVP.

Subject to the enacting of the Finance Bill 2018, the scheme, which was formerly known as the business expansion scheme, is set to run until 2021.

Under EIIS, an individual can invest up to €150,000 in any one tax year, and tax relief is offered in two tranches – 30 per cent in year one, with a further 10 per cent in year four, provided additional criteria are met.

This relief can be offset against tax owed, and can even be offset against rental income. In addition to tax relief, investors will also hope to benefit from a return on their investment, which, if it materialises, will be subject to capital gains tax.

‘My credit card company must hate me because it makes very little out of me’

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Public-sector pensions worth 80% more than those in private sector

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Forget logic. Investment is driven mostly by emotion

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Short trip abroad cost me a non-contributory pension

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Qualifying companies will typically be businesses which have been trading for no more than seven years.

Green investments

Dublin-based BVP, which specialises in green investments, itself has put money to work in five companies in 2018 under its own EIIS tax relief fund, including digital health company HealthBeacon, energy-saving lighting specialist Urbanvolt, digital parking marketplace Parkpnp, software firm Utility AR, and Cork Green Energy.

"This is a key month for EIIS investors and investee companies as the deadline for 2018 investors approaches," said Elliott Griffin, chief executive of BVP, which expects to raise €4 million in its 12th EIIS fund, which closes on December 31st. "We already have a number of EIIS qualifying companies lined up for investment in 2019."