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SEIS / EIS UK permanent establishment condition

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Seed Enterprise Investment Schemes (“SEIS”) and Enterprise Investment Schemes (“EIS”) allow qualifying companies to raise much-needed capital by offering investors tax reliefs. The tax reliefs are available to UK taxpayers only; however, companies incorporated outside of the UK can raise money through the schemes.


All companies seeking to raise money through SEIS and/or EIS must meet the permanent establishment condition. A permanent establishment is a fixed place of business in the UK that a significant element of a company’s business is partly or wholly carried out.

For SEIS and EIS purposes, an example of a permanent establishment would be:

  • A workshop,
  • A place of management,
  • A branch.

A company can meet the permanent establishment condition by having a UK qualifying agent. 

To be qualifying, agents must:

  • Be UK based,
  • Has the authority to enter into contracts and act on behalf of the company,
  • Acts on behalf of the company regularly.

Agents are unqualifying if they offer services to benefit their own business, such as brokers. If an agent cannot act on behalf of the company or does not so regularly, this would be unqualifying. 

Companies incorporated in the UK typically meet this condition as incorporation requires to have a UK representative and registered office address. Overseas companies looking to raise SEIS and/or EIS monies must ensure they qualify for this condition. This has to be done by the holding company and subsidiaries do not qualify as a permanent establishment. For more information on how an overseas company can be eligible for SEIS and/or EIS please check out our blog or eBook.

 

 

Seed Enterprise Investment Scheme (SEIS)

Johnathan Graham
Johnathan Graham
Johnathan assists companies with business plans, advanced assurance applications for SEIS, EIS and R&D tax credits. Johnathan has a keen interest in helping start up companies, stemming from his entrepreneurial background in owning two companies of his own. Contact Johnathan by email at: johnathan@sapphirecapitalpartners.co.uk.

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