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Seed Enterprise Investment Scheme & Enterprise Investment Scheme




Seed Enterprise Investment Scheme (SEIS) is an investment scheme introduced by UK Government in 2012 to promote entrepreneurship and small and risky businesses to achieve their goals in the UK. It is very crucial for young businesses that are hungry for funding to go ahead. The scheme allows individual investors with certain tax benefits in order to attract and appeal to them to inject their funds into these young businesses.

SEIS helps new business to avoid bank loans which could be leveraged and provides a strategic injection of funds by investors that can get stellar returns basis the performance and growth of the business.

The individual investors can invest up to 200,000 GBP a year and claim a tax relief of 50% of the same provided the business should:

  • be a new one or has been trading for not more than 3 years

  • be a qualifying one

  • be established in the UK

  • not be planning to get listed or become a subsidiary of one at the time of the share issue

  • have less than 25 full-time employees in total when shares are issued to investors

  • Investors should be individuals, that is, corporates, institutions, and venture capital firms cannot invest

  • The total funding cannot exceed 250,000 GBP


Enterprise Investment Scheme (EIS), similar to SEIS, was rolled out in 1994. It invests in innovative and entrepreneurial ventures but it is applied in larger and more established ones.

It is to be noted that these schemes are in no way venture capital funding. The Government provides tax and loss benefits to individual investors (no benefits to corporates in the case of EIS) investing in these businesses to help them flourish while providing the investors with specific tax reliefs.

EIS has different criteria for Knowledge Intensive Companies (KIC). These companies have high research and development costs.

The investors can invest up to 1,000,000 GBP a year and claim a tax relief of 30% of the same provided the business should:

  • not have been in existence for more than 7 years or 10 years in the case of KIC

  • have up to 250 employees and 500 in the case of KIC

  • The total funding cannot exceed 12,000,000 GBP and 5,000,000 GBP in a year. In the case of KIC, total funding cannot exceed 20,000,000 GBP and 10,000,000 GBP in a year


Note: Businesses that have already received funding through Enterprise Investment Scheme or Venture Capital Trust, cannot use Seed Enterprise Investment Scheme.


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