The Rewards of Investing in EIIS- Eligible Companies
When it comes to stimulating economic growth and attracting investment, governments around the world have employed various incentives and schemes. These initiatives are designed to encourage individuals and businesses to invest their capital in specific sectors or regions. Investing money is a popular way to grow wealth and secure financial stability. There are various investment options available, each with its own benefits and risks. One such investment opportunity in Ireland is the Employment and Investment Incentive Scheme (EIIS). The EIIS is a government initiative designed to encourage investment in small and medium-sized enterprises (SMEs) by providing tax relief to investors.
What are the rewards for investing in EIIS- Eligible Companies?
The Tax incentive provides tax relief of up to 40% of the investment made in certain corporate trades. The EIIS allows an individual investor to obtain income tax relief on investments for shares in certain companies up to certain limits each tax year. It offers attractive tax benefits to investors while providing much-needed funding for businesses. Under EIIS, individuals can receive income tax relief on their investments up to a maximum of €250,000 per year.
Focus on SMEs:
Unlike many other investment incentives that primarily target large corporations or specific industries, EIIS is specifically geared towards supporting small and medium-sized enterprises (SMEs). These enterprises form the backbone of the Irish economy, driving innovation, creating jobs, and fostering entrepreneurship. By incentivising investment in SMEs, EIIS aims to provide crucial funding and support to this sector.
Alignment of Interests:
EIIS encourages a strong alignment of interests between investors and the companies they invest in. To qualify for the scheme, companies must meet strict eligibility criteria, including requirements related to employment creation, trading activities, and limitations on certain sectors. This ensures that the investments are directed towards companies with genuine growth potential, increasing the likelihood of a return on investment for the investor.
By incentivising investors to support businesses in targeted areas, EIIS helps to create employment opportunities, boost local economies, and foster regional development. This approach does not only help to distribute investment across the country but also encourages a more balanced economic growth.
Diverse Investment Opportunities:
EIIS offers investors a wide range of investment opportunities across different industries and sectors. This diversity allows investors to choose investments that align with their interests, expertise, and risk appetite. Whether it’s technology, renewable energy, manufacturing, or services, EIIS provides a platform for investors to support businesses across a broad spectrum of sectors, promoting economic diversity and resilience.
Where does my money go?
When you invest your money in EIIS, you become a shareholder in a qualifying company. Investing in EIIS also provides an opportunity to diversify your investment portfolio. Traditional investment options such as stocks and bonds may dominate many portfolios, but including alternative investments like EIIS can add a new dimension to your investment strategy. By allocating a portion of your funds to EIIS, you can spread your risk across different asset classes and potentially benefit from the unique growth potential offered by early-stage companies.
Unlike passive investments where you simply purchase shares and wait for returns, investing in EIIS allows you to actively participate in the growth and development of the invested company. As a shareholder, you may have the opportunity to receive regular updates and progress reports. You can even contribute your expertise and guidance if desired. This level of involvement can provide a sense of satisfaction and connection with the investment. It helps knowing that you are directly supporting the success of a local business. It’s worth noting that investing in EIIS should be a long-term commitment. Early-stage companies often require time to develop their business strategies, execute plans, and achieve growth milestones. EIIS is a medium to long-term investment strategy.
Conclusion
In conclusion, the Employment and Investment Incentive Scheme (EIIS) stands out as a distinctive investment incentive. Its focus on SMEs, generous tax relief benefits, risk mitigation measures, alignment of interests, contribution to the local economy, and provision of professional investment management set it apart from other investment incentives. By combining these features, EIIS aims to foster entrepreneurship, support economic growth, and create a favourable environment for investors looking to make a positive impact on the Irish 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.
