Steps Involved In The EIIS Investment Application
The Employment and Investment Incentive Scheme (EIIS) is a government initiative designed to encourage private investment in small and medium-sized enterprises (SMEs) in Ireland. If you’re interested in investing in the EIIS scheme, it’s important to understand the steps involved in the investment application process.
Step 1: Research Eligible Companies
The first step in the investment application process is to research eligible companies in which you may want to invest. To be eligible for the EIIS scheme, companies must meet certain criteria, such as being an SME, a trading company, and an Irish-based company. Once you have identified eligible companies, you should request a copy of their prospectus.
Step 2: Make the Investment
Once you have identified a suitable company for investment, the next step is to make the investment. Investors must invest a minimum of €250 in the qualifying company. The investment is made by subscribing for new shares in the company.
Step 3: Complete Application Form
Complete company EIIS application form. The application form is usually available by contacting the company. The form requires the investor to provide details such as their name, address, and PPS number, as well as amount of their investment, together with photo ID and a recent utility bill for anti-money laundering legislation.
Step 4: Claim Tax Relief
Once the investor has received their certificate of eligibility from the company, they can claim tax relief on their investment. The amount of tax relief available is up to 40% of the amount invested, subject to certain conditions. The tax relief is claimed by including the relevant information on the investor’s annual tax return.
Under the scheme, a taxpayer who puts money into an approved EII investment can reduce a substantial portion of their taxable income for the year in which the investment was made. The maximum investment allowed from 1st January 2020 is:
- €250,000, subject to those shares being held for a minimum period of 4 years or
- €500,000, subject to those shares being held for a minimum period of 7 years.
Tax relief on EIIS investments are not subject to the High Earners Restrictions. A married couple can each obtain individual relief on an investment of €250,000/€500,000. This is provided each spouse has sufficient taxable income. The rules of the EIIS scheme changed significantly in successive Finance Acts since 2015. The biggest changes were introduced with effect from 1 January 2019 when self-certification was introduced. This means that instead of Revenue processing EIIS applications and certificates, the investee companies will now self-certify applications. They issue certificates directly to investors. This should significantly reduce the time investors have to wait to receive their tax relief.
Recently, The Minister for Finance announced further changes to the EIIS Scheme effective from 1st January 2022. Investors are now eligible to receive their Statement of Qualification Certificates (SOQ) immediately upon investment, rather than having to wait until the Company spends 30% of the investment funds received.
Conclusion
Investing in the EIIS scheme can be a valuable way to support the growth of Irish SMEs while benefiting from potential tax relief. The investment application process involves researching eligible companies, making the investment, completing the application form, submitting supporting documents, receiving notification of eligibility, and claiming tax relief. By following these steps, investors can participate in the EIIS scheme and contribute to the development of Ireland’s economy.
Further Information
For further information, you can also contact us at Medpoint for a copy of our 2023 Prospectus on 01 901 0395 or by e-mail at eiis@medpoint.ie.
