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EIIS lends helping hand in a time of Brexit

25 November 2019

Sinéad Heaney, Partner, Corporate Investment & Business Advisory at BDO and Director of BES Management DAC, recently featured in The Sunday Business Post “EIIS lends helping hand in a time of Brexit”.

EIIS is probably the only tax relief available to individuals apart from pensions. With Brexit and other retreats on the near-horizon, there is a need to support SME’s. “With Brexit on everyone’s mind and the challenges and risks around it, we are seeing that Irish businesses are very focused and have ambitious but realistic plans,” said Sinead.

“EIIS is a great way to support indigenous businesses and claim a tax relief at the same time.”

BES Management DAC is the leader in advising and funding ambitious Irish businesses, helping them to grow in domestic and international markets. “We set up BES Management DAC in 1995 and it’s the longest-running EIIS fund on the market,” said Sinead. “So far, we have raised eight EIIS funds and 19 BES project funds.

“Essentially, we go to market once a year. With EIIS, individuals can invest directly in a company or they can go to a fund like BDO. When an individual comes to us, we take their investment capital and invest it across a range of different companies.

“BES Management DAC has a lot of experience related to legislation and a very experienced board who assess the companies we invest in. We are the longest running scheme fund manager in the market, and we have seen the kinds of businesses that have done well and delivering jobs and growth.”

For three decades, The Employment Investment Incentive Scheme (EIIS), originally the Business Expansion Scheme (BES), has provided a vital source of alternative funding for businesses in Ireland. “We think that the scheme has huge benefits for Irish businesses self-certifying and understanding the legislation,” said Sinead. “We invested a lot of time this year ensuring we understand the new EII Scheme rules and are trying to make the assessment process transparent and accessible as a scheme for investee companies”

Budget 2020’s changes to EIIS have been very encouraging, said Sinead. Previously, it was widely thought that the scheme needed to do a better job of rewarding people who invest in indigenous Irish companies. The process of filling out the forms was cumbersome, and the approval delay could be a hindrance in the business’s talks with investors. “The investment limit has increased to €250,000 which we think is positive and shows that there is a recognition that having these types of funds available to SMEs is hugely positive for the country,” said Sinead.

Previously, tax relief was staggered over two stages. “From an administrative point of view there used to be a huge amount of work to process and collate the information”, she said. “It was an unnecessary body of work if a company were meeting the initial criteria”

BDO will be launching a new fund in the coming weeks “We are looking to raise a fund in excess of €10 million,” said Sinead. “This is based on the appetite we are seeing. There are lots if investment opportunities around and that is hugely positive.

“We are well established in the market and we are seeing very strong demand from indigenous Irish businesses,” said Sinead. “It is great to see this support from the government, and they recognise the benefits that the scheme is delivering to indigenous business.

“The new amendments to the tax relief available are very welcome and show that the government is committed to delivering support to business. EIIS is a key source of funding for businesses, and we can see that in our portfolio.”

Content adapted from The Sunday Business Post article : "EIIS lends helping hand in a time of Brexit" by Lorraine Courtney