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Do we have to be a UK company?

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Do we have to be a UK company?

EIS for companies

To qualify for EIS investment, a business must have a permanent UK presence.

EIS is a tax incentive for UK-based investors and applies only to companies with a UK presence. However, this doesn't necessarily mean the company must be originally from the UK. In order to qualify, a business must have a "permanent establishment" in the UK. It is no longer a requirement for the company to be "trading mainly in the UK".

HMRC provides examples of a "permanent establishment" as follows:

  • a place of management
  • a branch
  • a workshop
  • a quarry, mine, oil or gas well
  • a building site, such as a construction or installation project

If you’re a holding company, the business of your trading subsidiaries doesn’t have to be carried on from your premises. The administrative and management functions of your company will likely be enough to count for the permanent establishment condition.

Foreign-registered parent companies must have a permanent establishment in the UK itself in order to qualify. The presence of UK subsidiaries is not sufficient.


More information:

How can we raise money via EIS?

Step by Step Guide

What can EIS money be used for?

What trades are excluded?

Does my company qualify for EIS?

What is EIS?

How much can we raise?

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PLEASE NOTE:

To qualify for EIS relief, investors must be UK resident for tax purposes (or have UK tax liabilities) and subscribe cash for new shares in qualifying companies. Tax treatment is dependent on individual circumstances and may be subject to change. This content is written in general terms and you are strongly recommended to seek specific advice before taking any action based on the information it contains. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this content. It is also important to realise that investing in small companies always carries risks, including the loss of capital, illiquidity (the inability to sell assets quickly or without substantial loss in value), lack of dividends and share dilution. Investments should still be made as part of a diversified portfolio.