BES and Seed Capital Scheme get approval from EU

The Minister for Finance has signed orders opening the way for small companies to raise money through the Business Expansion Scheme (BES) and Seed Capital Scheme.

Mr Cowen yesterday signed regulations and commencement orders for the schemes, which had been stalled by a European Union review of the measures.

"I am delighted that these two schemes will now be available up to the end of 2006," said Mr Cowen.

Former minister for finance Mr Charlie McCreevy gave a three-year extension to the BES and Seed Capital scheme in his budget last December. However, the European Commission announced its intention to review the schemes.

That review resulted in minor amendments to the schemes, which have now been accommodated in legislation. These restrict relief to a maximum of €750,000 in any six-month period and prevent investment in certain sectors and in circumstances where such investment could be seen as rescuing companies that were not otherwise viable.

Mr Pat Delaney, chief executive of the Small Firms Association, welcomed the announcement.

"These schemes are hugely important for small business and this action means they are now secure for the next couple of years," he said.

The Institute of Chartered Accountants in Ireland said the extensions were important as the schemes "have played an important role in supporting the critically important start-up business sector since their inception".

Institute president Mr Terence O'Rourke said the cost of the schemes was not particularly expensive, given their significance for an important sector of the economy.

"It is important to note that the amount of relief available to potential investors has been capped at €32,000," he said.