Enterprise Investment Schemes (EIS) offer the opportunity for forward-thinking investors to get involved in some of the most exciting and promising early-stage businesses in the UK. Businesses under the EIS scheme tend to operate in some of the new and fastest-growing sectors meaning the potential for rewards from investments can be significant. Here we will find out more about what an EIS is and what it means for investors.
What is an EIS?
Enterprise Investment Schemes (EIS) is a UK government incentive designed to encourage investment in small and medium-sized companies. By investing in an EIS the investor benefits from tax incentives as well as the potential for returns on investment. EIS investments are a brilliant alternative option to traditional stocks and bonds. One of the key advantages is the tax relief they offer. By investing in the early stages of a business there is more potential for high returns than more established enterprises. There are multiple tax benefits when investing in an EIS fund such as income tax relief, loss relief and capital gains deferrals.
SEIS or EIS
With SEIS you can only invest in very early-stage companies. Whereas the EIS is intended for more established businesses that have already been operating for five years. An EIS is a fund invested in companies that qualify for the scheme.
There are a variety of reasons an investor might choose an EIS fund including: tax benefits and reliefs, portfolio diversification to reduce the overall risk of the portfolio, the potential for high returns and supporting small businesses. To find out more about how to get involved with the Enterprise Investment Scheme you can learn more from Oxford Capital.
What Is An EIS Fund?
An EIS fund pools investors’ money together to invest in a variety of EIS-eligible companies. The fund acts like a partnership between the investors and the company. It provides investors with the opportunity to invest in a diversified portfolio of companies with high growth potential across a range of businesses, sectors and stages of development. The EIS is designed to help growing companies raise finance and provides investors with a tax-efficient way of investing in high-risk ventures across different industries and sectors.
How To Buy EIS Investments
First, you will need to find an EIS provider, for example through a financial advisor or investment platform. Look for a provider that has a good history of investing in early-stage businesses. An EIS provider acts as an intermediary between EIS-eligible companies and the investor. The provider can provide support and advice to investors as well as facilitate transactions of any investments.
Why Should Investors Consider An EIS Fund?
It is important to carefully consider an EIS provider before investing to make sure they have a strong track record and reputation for providing quality investment opportunities and ongoing support. Finally, it is essential to carefully evaluate and research the potential risks and rewards before investing and to seek the advice of a professional financial advisor or investment manager.
To Sum Up
Investing in an EIS gives you the opportunity to get a good return on your investment, help up-and-coming companies to grow and invest in new and emerging ideas. An EIS offers investors the chance to invest and get involved in small to medium-sized businesses at a key stage in their growth. It’s not just an investment, but helps fuel the economy and who knows what innovation might be the next global success?
