EII Scheme for Investors
The 2019 Davy EIIS Fund is now closed.
What Is the Employment and Investment Incentive Scheme?
The Employment and Investment Incentive Scheme (“EII Scheme”) is an income tax relief incentive scheme which can provide all income tax relief to Qualifying Investors for investments made in certain qualifying Irish small and medium sized companies (“SMEs”)*.The EII Scheme offers one of the few remaining income tax reliefs and is one of the few sources of total income tax relief (which includes, for example rental income).
*Exceptions apply, for more information please refer to the Prospectus under the section “Relevant Trading Activities” on page 31.
The 2019 Davy EIIS Fund (“The Fund”)
The 2019 Davy EIIS Fund will be managed by BES Management DAC which is a joint venture between BDO and Davy and is Ireland’s longest running BES/EII Scheme Manager.
Key Characteristics of BES Management DAC:
- Owned by BDO and Davy;
- Successfully raised eight EII Scheme Funds over the past 8 years;
- Previously raised 19 BES Funds over the past 24 years;
- Raised over €187 million which is invested in over 175 Irish companies; and
- Funds are managed by a professional and experienced management team
Prospective Investors should determine the suitability of the investment based on an assessment of their own personal circumstances, attitude to and capacity for investment risk. The investment may be suitable for investors who:
- Do not need access to their investment for the term of the investment, which will be at least four years from the date the Fund first makes its investments;
- Will be able to avail of income tax relief on the full investment, within the relevant limits and restrictions;
- Are aware they may lose some or all of their investment; and
- Can afford to lose some or all of their investment.
Benefits of investing in The 2019 Davy EIIS Fund:
***Terms and conditions apply. Please refer to the section headed “Income Tax Relief” on page 27 for detailed information relating to claiming the income tax relief. Investors may avail of the tax relief by deducting the Investment amount (subject to a maximum of €150,000 invested in all EIIS Funds and schemes in any one year) subscribed to the Fund in 2019, from their total income for income tax purposes for the tax year of subscription ending on 31 December 2019 or, if so desired for the tax year of Investment by the Fund ending 31 December 2020, subject to the Investee Companies complying with the EII Scheme Legislation and certain conditions being fulfilled by the Investee Companies further detailed in the section headed “The Relief” on page 28. You should consult your tax advisor about the tax relief rules which may apply in your circumstances. This Investment may not be suitable for all Investors. For more information on the tax relief, please refer to section headed “The Relief” on page 28.
WARNING: If you invest in an investee company through this fund you may lose some or all of the money you invest.
The value of your investment may go down as well as up.
If you subscribe to this fund you will not have any access to your money for at least four years from the date the Fund first makes its investments. Other risks and terms and conditions apply.
The funds are invested in established, indigenous Irish companies with future growth potential.
Below is a sample of companies in which previous Funds managed by BES Management DAC invested:
The companies outlined above are illustrative of the type of SMEs the Funds have or aim to invest in. The final portfolio of companies in which a Fund will invest will not be determined until after subscription monies have been received and the relevant Fund has closed, and could differ from the type of SMEs outlined above.
Risks of investing in The 2019 Davy EIIS Fund
- This is a medium to long-term Investment (for a period of at least four years from the date of Investment in each Investee Company) and there is no early exit mechanism.
- If you invest in Investee Companies by subscribing to this Fund you may lose some or all of the money you invest.
- There is no guarantee that the Fund will achieve its Investment objectives or primary objective.
- Investors are exposed to the performance of the small and medium sized companies invested in via the Fund which by their nature are high risk.
- The availability of the income tax relief on the Investment amount is based on our understanding of current tax legislation and the current Revenue Commissioners’ interpretation thereof. Legislation and Revenue Commissioners interpretation is subject to change including retrospectively without notice.
- Income tax relief which is available, within limits, against income earned in the tax year of subscription to the Fund (2019) or if so desired, the tax year of investment by the Fund (2020), may not be granted, or granted in full, or may be withdrawn where already claimed, in part or in full, if the conditions of the legislation are not satisfied by the Fund and/or Investee Companies, including:
- The Manager may not succeed in finding suitable companies and/or fully investing the monies subscribed to the Fund which may result in a return of uninvested funds and a consequent reduction or recovery of the income tax relief already claimed or potentially available to Investors.
- Statements of Qualification for the tax relief may not be issued by Investee Companies if the conditions as set out in the section “Income Tax Relief” on page 27 are not fulfilled. In such circumstances the Manager cannot issue a Managers Certificate and income tax relief will not be available to the Investors, or if already claimed may be required to be refunded to Revenue by the Investor.
- If a company in which the Fund is invested fails to spend 30% of the amount raised on a Qualifying Purpose within two years from the issue of Eligible Shares, that Investee Company cannot issue a Statement of Qualification; in such circumstances, the Manager cannot issue a Managers Certificate and the income tax relief on that Investment will not be available to the Investor.
- Income tax relief which is available, within limits, against income earned in the tax year of subscription to the Fund (2019) or if so desired, the tax year of investment by the Fund (2020), may not be granted or may be withdrawn where already claimed, in certain circumstance, including:
- You may not have sufficient income taxable at the higher rate so that part or all of the income tax relief on the Investment amount, if obtained, may be obtained at a lower rate than 40%, the current higher rate of income tax.
- You may lose part or all of the income tax relief you obtain on the Investment amount if you receive value from any of the Investee Companies in which you invest through the Fund within a period of two years before and ending four years after the investment in the company (as detailed in the section “Withdrawal of Relief – Investor” on page 32).
- The EII Scheme operates on a self-certification basis which requires Qualifying Companies to self-certify and issue Statements of Qualification. In certain circumstance, the Investee Company bears the risk of the Relief not being granted or withdrawn as a result of incorrect self-certification and circumstances detailed in the section “Withdrawal of Relief – Investee Company” on page 32. In these circumstances, the Investor may bear the risk of the commercial impact of a withdrawal of Relief from the Investee Company and hence may impact the value of the Investment. In certain other circumstance, the Investor bears the risk of the Relief not being granted or being withdrawn as detailed in the section “Withdrawal of Relief – Investor” on page 32.
WARNING: The information contained in this document is based on our understanding of current tax legislation and the current Revenue Commissioners interpretation thereof and is subject to change including retrospectively without notice.
This is intended as a general guide only and is not a substitute for individual tax advice. Potential Investors should seek competent professional tax advice specific to their circumstances prior to investing.
Investors are responsible for establishing their entitlement to participate in this investment and for making their own tax relief claims.