What is the minimum investment for EIIS?
The Employment and Investment Incentive Scheme (EIIS) is a tax relief incentive. It provides tax relief for individuals against total income for income tax purposes. The scheme aims to encourage private investment in small and medium-sized enterprises (SMEs). It does so by providing tax relief to investors who purchase shares in qualifying companies. EIIS offers one of the few remaining income tax reliefs and is one of the few sources of total income tax relief. It includes includes, for example, rental income, Approved Retirement Fund (ARF) distribution income. The Tax incentive provides for 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. Relief under EIIS is available to individual investors in unquoted micro, small and medium sized trading companies.
One of the most common questions asked about the EIIS is:
What is the minimum investment required to participate in the scheme?
The minimum investment required to participate in the EIIS varies depending on the company offering the investment opportunity. The legislation governing the EIIS sets out a minimum investment threshold of €250 per investor. However, individual companies may set higher minimum investment thresholds. This may vary depending on the size and nature of the company.
Investors should also be aware that there are annual investment limits for the EIIS scheme. Under the scheme, a taxpayer who puts money into an approved EIIS 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.
There is also a lifetime investment limit of €15 million.
It’s important to note that investing in the EIIS scheme carries risks, and investors should carefully consider the investment opportunity before committing any funds. Investors should conduct due diligence on the company and seek professional financial advice before investing in any EIIS-eligible company.
In addition to the potential tax relief benefits, investing in the EIIS scheme can also provide a valuable opportunity to support the growth of Irish SMEs. By investing in local businesses, investors can help to create jobs, drive innovation, and contribute to the development of Ireland’s economy.
Tax relief benefits
Another factor to consider is the potential tax relief benefits available through the EIIS scheme. Investors in qualifying companies can receive income tax relief of up to 40% of the amount invested. For example, if an investor invests €10,000 in a qualifying EIIS-eligible company, they can receive tax relief of up to €4,000. The tax relief is subject to certain conditions, including a minimum holding period of four years.
It’s also worth noting that the EIIS scheme offers additional benefits to investors beyond tax relief. For example, investors in EIIS-eligible companies can benefit from potential capital gains if the company performs well and grows in value. This can provide a valuable return on investment for investors who are willing to take on the associated risks.
In summary, the minimum investment required to participate in the EIIS scheme varies depending on the company offering the investment opportunity. Investors should carefully consider the investment opportunity and the associated risks, as well as the potential tax relief benefits and other advantages of investing in EIIS-eligible companies. By investing in the EIIS scheme, investors can not only benefit from tax relief but also support the growth of Irish SMEs. Thus, 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.
