Business advisers have given a cautious welcome to reforms of one of the State's flagship schemes for incentivising investment in start-ups in Budget 2020.
Paschal Donohoe, the Minister for Finance, has raised the annual investment limits and introduced measures to attract long-term equity funding through the Employment and Investment Incentive Scheme (EIIS), which gives tax breaks to investors linked to how much they invest in growing businesses.
“I intend to continue the reform of the EIIS that I started last year,” he said.
In today’s Budget speech, the minister announced he was increasing the annual investment limit under the scheme from €150,000 to €250,000.
In future, the tax relief can also be claimed in full in the year of investment, rather than the current scenario when some of the relief must be held over for three years.
A new €500,000 investment limit is also being introduced, but only for EIIS funding from “investors who are prepared to invest... for ten years or more”.
The changes, the full details of which will be fleshed out in January’s Finance Bill, will be backdated to today, Mr Donohoe said.
Darragh McCarthy, an associate partner at professional services firm EY, said the changes “will support growing Irish businesses to attract funding to support growth and job creation in the economy”.
“Relief will now be available for investors in full in the year of investment, as compared to three quarters in year one and one quarter in year four,” he said. “Key will be the details in the Finance Bill as accessing EIIS has proven difficult in practice.”