EIS, VCT & SEIS – Qualifying companies

The Enterprise Investment Scheme (EIS), Venture Capital Trust Scheme (VCT) and Seed Enterprise Investment Scheme (SEIS) aim to help unquoted companies attract equity investment by offering investors a range of tax incentives. 

EIS and VCT qualifying companies must:

• Be unquoted – although AIM companies do qualify
• Be independent
• Have gross assets of less than £15m before the EIS/VCT share issue, and £16m afterwards
• Have less than 250 employees (500 if a knowledge intensive company)
• Raise no more than £5m per year per group from a combination of the EIS, SEIS and Venture Capital Trusts
• Raise no more than £12m (£20m if a knowledge intensive company) in total per group from a combination of the EIS, SEIS and Venture Capital Trusts
• Be trading companies – though certain types of trade are prohibited. See ‘Excluded companies’ below

SEIS qualifying companies must:

• Be unquoted – although AIM companies do qualify
• Be independent
• Have gross assets of less than £350,000 (£200,000 before 6 April 2023) before the SEIS share issue
• Have fewer than 25 employees
• Raise no more than £250,000 (£150,000 before 6 April 2023) per group in any three-year period
• Carry on a genuine new trade – though certain types of trade are prohibited. See ‘Excluded companies’ below
• Not have raised any money under the EIS or VCT schemes. (However, a company which has issued SEIS shares can then go on to raise further investment from EIS and/or VCT investors.)

Excluded activities

Companies whose trades consist substantially (more than 20%) of the following activities are excluded from the VCT/EIS/SEIS:

• Dealing in land, in commodities or futures, or in shares, securities or other financial instruments;
• Dealing in goods otherwise than in the course of an ordinary trade of wholesale or retail distribution;
• Banking, insurance, money-lending, debt-factoring, hire-purchase financing or other financial activities;
• Leasing (including letting ships on charter or other assets on hire), or receiving royalties or licence fees. Exceptions are made for intangible assets created by the issuing company or its subsidiaries;
• Providing legal or accountancy services;
• Farming and market gardening, woodlands and timber production;
• Property development;
• Operating and managing hotels and nursing homes;
• Coal production
• Steel production
• Shipbuilding
• All energy generating and supply and creating fuel
• Providing services to a connected person conducting one of the above trades