Enterprise Investment Scheme

Investments in exciting early-stage companies for people who are comfortable with high risk.

The Enterprise Investment Scheme (EIS) is a government-backed initiative offering tax reliefs to investors who buy new shares in qualifying companies. 

This type of investing is for people who:

  • Want to hold shares in small companies with potential to grow to many times their current value.
  • Are comfortable taking on the risks of backing these businesses at an early stage and staying invested for the long run.

Investing in EIS with Octopus

Octopus has a long-established history of investing in smaller companies, and is regularly approached by talented entrepreneurs who need funding to help them scale up.

Octopus Ventures, one of the largest and most experienced venture capital teams in Europe, has previously backed companies such as Graze, Zoopla, Patch, Secret Escapes and others, working with their founders to turn them into household names.

Investors should always understand the risks involved before choosing an EIS investment. Not all EIS-qualifying companies will be successful, and the shares of those that fail will lose all their value.

Reasons to invest

High growth potential

An EIS investment can give investors access to companies they may not otherwise hold, and which have the potential to multiply in value.

Support UK growth

Investing in an EIS means investors are helping innovative smaller companies to create jobs, prosperity and economic growth across the UK.

Tax incentives

There’s a package of valuable tax reliefs as an incentive for taking higher risk. These reliefs include upfront income tax relief, tax-free capital gains, loss relief, capital gains tax deferral, and inheritance tax relief.

Complements long-term investments

An EIS can complement other long-term investments like ISAs and pensions as another way to invest for retirement but with a different risk profile.

Understanding the risks

Capital at risk

The value of an EIS investment can fall as well as rise. Investors might not get back the full amount they invest.

Tax treatment may change

Tax treatment depends on individual circumstances and might change in the future. Tax reliefs depend on companies maintaining their EIS-qualifying status.

Minimum holding period

Investors need to hold shares for three years to keep any tax reliefs claimed. Investors should be prepared to hold their shares for significantly longer to allow time for growth and exit.

Volatility and liquidity

Investments in smaller companies can fall or rise in value much more sharply than shares in larger, more established companies. They can also be harder to sell.

Who can benefit from EIS?

See our EIS planning scenario to see the type of investor
who could benefit from EIS.

Clients looking for high growth investment opportunities

Learn more about EIS

Read our guide about Enterprise Investment Schemes.

The Tax Planning Show

Watch this webinar as we take you through some potential scenarios- everything from a client surrendering an investment bond, to a client with a buy-to-let portfolio.

EIS from Octopus

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