Seed Enterprise Investment Schemes (SEIS) and Enterprise Investment Schemes (EIS) allow qualifying companies which have been trading for under two- and seven-years respectively, to raise significant capital to grow and develop their trade, by offering substantial tax reliefs to high net UK investors. Qualifying companies outside of the UK, such as Ireland, can also raise significant capital under SEIS and EIS, although tax reliefs are only available to UK investors.
With the Republic of Ireland bordering with Northern Ireland, companies from the Republic are in a prime position to place an element of their business in the UK and meet the permanent establishment condition. With only an hour train ride from Dublin to Newry or Belfast, Irish companies could very easily set up a branch and apply for the schemes. These schemes require companies to meet both the permanent establishment condition and the other qualifying conditions. Here are five reasons why Irish companies should consider applying for SEIS and/or EIS:
- Close Alignment: Despite the UK now having left the EU, both the UK and Irish regulations are still closely aligned. Irish and UK companies have a similar private limited company structure, as well as similar company law and regulation.
- Attractive Tax Benefits: Under SEIS and EIS qualified UK investors will benefit from 50% (for SEIS) and 30% (for EIS) tax relief. Plus 100% Capital Gains Tax relief, Capital Gains Tax Liability deferral (for EIS), 50% Capital Gains Tax exemption for chargeable gains reinvested (for SEIS), Inheritance Tax relief, and Loss Relief.
- Qualifying Company: Holding companies incorporated in Ireland can avail of SEIS/EIS if it meets the permanent establishment condition and filter investment down to a qualifying subsidiary. A company’s subsidiary doesn’t need to trade in the UK to qualify, under SEIS/EIS so long as the subsidiary is conducting a qualifying trade and is a 90% owned subsidiary by the holding company it can use the monies raised via SEIS/EIS
- No UK Subsidiary Needed: Foreign companies do not need to set up a subsidiary in the UK to qualify. Under SEIS and EIS, a subsidiary will not qualify for either scheme. Money can be raised by the parent company of subsidiaries and be filtered down, so long as it is a qualifying subsidiary and the parent company meets the permanent establishment condition (and the subsidiary is 90% owned by the holding company).
- Quick Turnaround: The application for opening a UK branch only takes a maximum of circa 45 days. During which time a company can put together their advanced assurance documentation and submit it to HMRC once they receive their Unique Tax Reference from Companies House, the UK companies register.
Irish and other foreign companies must meet all the qualifying conditions in order to qualify for SEIS and EIS. Our specialists at Sapphire will be happy to discuss whether your company qualifies and/or how you may be able to meet the qualifying conditions. For more information on how an overseas company can be eligible for SEIS and/or EIS please check out our blog or eBook.