A French government report on supporting investment into SMEs and growing smaller companies was published last week.
Alongside proposals to unlock investment from pension funds and large companies, the report praised the UK’s EIS and SEIS schemes and proposed introducing similar schemes in France.
The report;
- described the UK as Europe’s premier start-up ecosystem, highlighting the EIS and SEIS as some of the most generous schemes in Europe,
- highlighted the higher investment ceilings available under EIS and SEIS compared to existing French equivalents, with almost two-thirds of all UK EIS/SEIS investments exceeding the current French ceiling
- attributed the UK’s more developed business angel landscape, with 37,000 angels in the UK compared to 5,500 in France, to the EIS/SEIS schemes
- proposes introducing income tax relief on qualifying start-up investments of 30-50% – in line with what is available through EIS/SEIS – with an annual investment limit of up to €500,000. It also considers a loss relief system similar to what is available in the UK, and envisages the creation of qualifying investment funds
Nicholas Hyett, Investment Analyst at Wealth Club comments; “This is important international recognition for two schemes whose futures were in question just months ago.
The French report describes EIS and SEIS, together with VCTs, as “undeniable factors” in the UK’s success as a start-up powerhouse and the “premier start-up ecosystem” in Europe. It also highlights the importance of the higher EIS and SEIS investment limits, allowing companies to raise substantial sums under the scheme with the potential to make a real impact on their business.
Wealth Club clients have invested £121m directly into EIS companies, with a further £135m invested through EIS Funds, and the tax reliefs have been key to that – mitigating the substantial risks of investments in early-stage businesses. As a scheme to encourage investment into smaller companies it is well worth considering.
UK start-ups benefit from a certain ‘je sais exactement quoi’ – it’s the EIS and SEIS schemes, and it’s no surprise that other countries are seeking to replicate them.”
