What is the Enterprise Investment Scheme (EIS)
Information for businesses and investors
The Enterprise Investment Scheme is designed to help small high-risk businesses raise finance by offering various tax breaks to investors who invest in their shares. EIS investments therefore tend to be small businesses that are not quoted or listed. This can make the shares difficult to value and sell.

Investors can invest:

  • In individual companies qualifying under the EIS
  • In EIS investment funds investing in a number of EIS companies
  • Through an EIS managed portfolio service investing in EIS companies

Individual companies may seek investment via ‘business angels’ who take a substantial stake in the company, or may be available more widely to smaller investors.

Funds are generally similar to managed portfolios except all investors tend to have the same basket of shares and they are often structured as ‘Approved Investment Funds’ (AIFs) to benefit from certain tax concessions relating to minimum individual holdings and the timing of income tax relief. Minimum investments are typically £3,000 or £5,000, but can be higher.

EIS managed portfolio services tend to be more tailored to individual investor requirements and have higher minimum investments, typically £50,000+.

Some EISs of all types are restricted to high net worth individuals or sophisticated investors reflecting the high-risk nature of EIS investments, but in many cases ordinary investors can access EIS investment.

EIS Information sources

General EIS information

The Enterprise Investment Scheme Association

HM Revenue & Customs statistics on amounts raised

Find.co.uk

Information for investors

The Enterprise Investment Scheme Association

The British Business Angels Association

HM Revenue & Customs

Information for businesses seeking finance

The Enterprise Investment Scheme Association - Fund Raising Information

The Enterprise Investment Scheme Association - Applying for EIS Relief

Business Link

The British Private Equity & Venture Capital Association

The British Business Angels Association

HM Revenue & Customs

Intermediaries for EISs

Investors who are not business angels may choose to invest via an intermediary:

  • To get advice (See Unbiased to find an independent financial adviser)
  • To find out what is available and see information on a range of EISs in one place
  • Some EISs may only be available via an intermediary
  • Once you have identified yourself to an intermediary you will avoid having to send in ID documents with each application if you invest in a number of EISs
  • Some intermediaries often known as discount brokers do not give advice but will rebate some of their commission. Whilst this can be a benefit, be careful as for some EISs commission can be an extra cost so it may be cheaper to go direct

You should also check that the intermediary is authorised and regulated by the Financial Services Authority (check here)

Discount Brokers for EISs

 

Also see the advertising links on the right-hand side of the page

Intermediaries: want to be listed here? Click here

What EIS investments are available?

See EISA information and members, intermediary websites, some of the links above, and some of the advertising links on the right-hand side.

 

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