What is a knowledge-intensive company (KIC)?

Understand whether your company meets the KIC requirements when applying for EIS.

Knowledge-intensive companies (KICs) are given a somewhat special status under EIS. They can be older, have more employees, and raise more money than non-KICs. This is because HMRC classes a KIC as a company that carries out research, development and innovation, which often takes longer and costs more to set up and create.

As such, KICs have slightly broader eligibility criteria than normal EIS applications, but there are additional conditions KICs must meet to prove they are in fact a KIC. 

EIS & KIC criteria differences

EIS criteria: 

  • Trading for less than 7 years
  • Fewer than 250 full-time equivalent employees 

Under EIS, you can raise up to £5m each year and up to £12m in your company’s lifetime. 

Please note, this is just a high-level comparison between EIS and KIC criteria. Read here for EIS eligibility

KIC criteria:

  • Less than 10 years since your first commercial sale or annual turnover exceeding £200,000 
  • Fewer than 500 full-time equivalent employees 

As a KIC under EIS, you can raise up to £10m each year and £20m in your company’s lifetime. 

Individual investors can also invest — and claim tax relief on — up to £2m each year, if at least £1m is invested in KICs. 

It’s worth noting that you should only apply as a KIC if your company doesn’t meet the usual EIS criteria, or you want to raise more than EIS allows. Otherwise, you should just apply for EIS to avoid the added complexity and risk of your application being rejected. 

As well as the criteria above, KICs must also meet the operating costs condition and either the skilled employee condition or innovation condition. 

Operating costs condition 

You must spend money from your overall operating costs on research, development or innovation. This should be either:

  • 10% a year for 3 years
  • 15% in 1 of 3 years

If your company is at least 3 years old, you must have done this in the 3 years before the investment. If your company is less than 3 years old, you must do this in the 3 years following the investment. You’ll need to submit a schedule, supported by accounts to show that you have met this condition. 

Skilled employee condition 

Your company must have 20% of employees carrying out research and development for at least 3 years from the date of investment - these employees must be in a role that requires a relevant Master’s or higher degree. 

Innovation condition 

Your company must be carrying out work to create intellectual property and expect the majority of your business to come from this within 10 years.

You don’t necessarily have to be in a certain industry to meet these conditions. While a scientific research company may be an obvious KIC candidate, companies that develop software, technology or machinery can still qualify as a KIC. 


If you’re applying for EIS as a KIC, we'll guide you through the advance assurance process, explaining all the different criteria and conditions your company needs to meet. We’ll also review and submit your application to HMRC. 

Then if your application is successful and you go on to receive investment, you can issue the shares to your new investors directly from the Vestd platform.


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