Does my company qualify for EIS?

In order to raise capital that is eligible for Enterprise Investment Scheme tax relief, your company must:

• Be established in the UK
• Not trading on a recognised stock exchange at the time of the share issue and is not planning to do so (also known as an unquoted company)
• Not control another company other than qualifying subsidiaries
• Not be controlled by another company or not have more than 50% of its shares owned by another company
• Not have gross assets worth more than £15 million before any shares are issued and not more than £16 million immediately afterwards
• Have fewer than 250 full-time equivalent employees at the time the shares are issued
• Carry out a qualifying trade

A company must first raise EIS funds within seven years of its first commercial sale. A company that has already raised EIS money within its first seven years, can do so again at any point in the future (up to a total of £10m, or £20m for knowledge intensive companies). A company that has not raised EIS funds before, and is now older than seven years, can still qualify if it raises money amounting to at least 50% of its five year average turnover, and spends that money on entering a new product market or geographic market.

In addition, you must follow the scheme rules so that investors can claim and keep EIS tax reliefs relating to their shares. Tax reliefs will be withheld or withdrawn from your investors if you don’t follow the rules for at least 3 years after the investment is made.