EIS, or the Enterprise Investment Scheme, is a UK government-backed tax relief program designed to encourage investment in small, high-risk trading companies. It allows individual investors to claim tax relief on investments made in qualifying companies, which must meet certain criteria such as being unlisted, having fewer than 250 employees, and not being controlled by another company.
EIS is intended to help small businesses raise the capital they need to grow and develop, and to encourage more people to invest in such companies. Investors can claim back up to 30% of the value of their investment through EIS, and any profits made from selling their shares in the company may also be exempt from capital gains tax.
EIS is a popular option for early-stage companies looking to raise funding, as it can make investment in such companies more attractive to potential investors. It is worth noting that EIS is a complex area with strict rules and eligibility criteria, so it is advisable for companies and investors to seek professional advice before proceeding with an EIS investment.