EIS — the Enterprise Investment Scheme — is a UK government programme that most startup founders raising equity investment will encounter at some point. Like its counterpart SEIS, it offers tax advantages designed to incentivise external investment in growing businesses. Understanding what EIS is and how it relates to SEIS helps founders have more informed conversations with potential investors during a fundraising process.
EIS is a UK government scheme that encourages investment in qualifying trading companies by offering income tax relief, capital gains tax exemptions, and loss relief to eligible investors. It is designed for more established early-stage companies than SEIS — companies that have moved beyond the very earliest stage of development must use EIS rather than SEIS once they no longer meet SEIS criteria. Like SEIS, qualifying for EIS requires the company and the specific investment to meet conditions set by HMRC.
EIS opens the market to a broader range of investors than SEIS and can support larger fundraising rounds for qualifying companies. The two schemes are sometimes used in sequence as a company grows. The eligibility rules for EIS are detailed and change periodically, making professional advice before structuring a fundraising round essential. Our guide to EIS for UK founders covers the key qualifying criteria and how the scheme operates.