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What is the eligibility criteria for EIS?

Find out whether your company can raise investment under the Enterprise Investment Scheme (EIS).

Last updated: 07/10/2026

TL;DR: This guide explains which companies can raise investment under EIS. To qualify, your company must:

  • receive its EIS investment within 7 years of its first commercial sale (10 years for knowledge-intensive companies)
  • carry on a qualifying trade
  • have a permanent establishment in the UK
  • not be trading on a recognised stock exchange
  • have gross assets of no more than £30m before the investment
  • have fewer than 250 full-time equivalent employees

There are extra rules if your company has subsidiaries. For shares issued on or after 6 April 2026, most companies can raise up to £10m a year and £24m in their lifetime, or £20m and £40m if they're knowledge-intensive.

EIS is a government-backed scheme that helps companies raise investment by offering tax reliefs to the people who invest in them. This guide sets out the criteria your company must meet, how much you can raise, and how to apply through Vestd.

This guide is for company admins. For the rules investors must follow, see the rules SEIS and EIS investors must follow.

Contents📋

 

A few terms you'll see

These come up across the sections below, so we've explained them once here:

  • SEIS: the Seed Enterprise Investment Scheme, a similar scheme for companies at an earlier stage.
  • VCT: a venture capital trust. Investment your company receives from VCTs counts towards the same limits as EIS.
  • First commercial sale: the first sale your company makes on a product or service market, not counting limited sales to test the market.
  • Knowledge-intensive company: a company that carries out research, development or innovation and meets HMRC's conditions on operating costs and either intellectual property or skilled employees. These companies have higher limits under EIS.
  • Gross assets: all the assets that would be shown on your company's balance sheet, without any deduction for liabilities.
  • Full-time equivalent (FTE): a way of counting employees. A full-time employee has a standard working week of at least 35 hours, not including lunch breaks or overtime. Part-time employees are counted as a proportion of a full-time employee.
  • Qualifying subsidiary: a company your company owns or controls that meets HMRC's conditions for EIS.
  • Advance assurance: HMRC's view on whether your share issue is likely to qualify for EIS, given before you go ahead with it.

 

How EIS benefits investors

Investors who meet the scheme's conditions can:

  • claim income tax relief of 30% on the amount they invest
  • pay no capital gains tax on any gain when they sell their shares, provided they received income tax relief and have held the shares for at least 3 years

These reliefs make investing in your company more attractive, which can help you raise funds.

 

How much you can raise

These limits are combined totals across EIS, SEIS, VCTs and Social Investment Tax Relief (SITR). They are not EIS-only.

  • Most companies: up to £10m in any 12-month period, and £24m over the company's lifetime
  • Knowledge-intensive companies: up to £20m in any 12-month period, and £40m over the company's lifetime

To see whether your company counts as knowledge-intensive, read what is a knowledge-intensive company.

These limits apply from 6 April 2026, following changes announced in the Autumn Budget 2025. The previous limits were £5m a year and £12m over a company's lifetime, or £10m and £20m for knowledge-intensive companies.

 

Specified companies

Different limits apply if your company is a "specified company". This means its registered office is in Northern Ireland and it trades in either:

  • goods, usually involving the manufacture of goods, not including the service sector
  • the wholesale electricity market, including the generation, transmission and distribution of electricity

Specified companies can raise up to £5m in any 12-month period and £12m over their lifetime, or £10m and £20m if they're knowledge-intensive.

 

Company criteria

To qualify for EIS, your company must meet all of the following criteria:

  • Within 7 years of its first commercial sale:
    • Your company must receive its EIS investment within 7 years of its first commercial sale.
    • Knowledge-intensive companies have 10 years. They can choose to count this from either their first commercial sale or the date their annual turnover reached £200,000.
    • If your company is outside this period, it may still qualify in some cases. See the FAQs.
  • Carries on a qualifying trade: if your company is part of a group, the majority of the group's activities must be qualifying trades. Read more about qualifying trades.
  • Has a permanent establishment in the UK: your company must either:
    • have a fixed place of business in the UK where an essential and substantial part of its business is carried on, or
    • have an agent in the UK who regularly enters into contracts on its behalf.
  • Isn't trading on a recognised stock exchange: your company must not be trading on a recognised stock exchange when the shares are issued, and must not plan to do so.
  • Doesn't expect to close after completing a project or series of projects.
  • Gross assets of no more than £30m before the shares are issued, and £35m immediately after:
    • For specified companies, the limits are £15m and £16m.
    • If your company is the parent of a group, the limit applies to the combined gross assets of the group.
  • Fewer than 250 full-time equivalent employees when the shares are issued:
    • Fewer than 500 if your company is knowledge-intensive.
    • If your company is part of a group, the limit applies to the whole group.
    • For example, someone working 21 hours a week counts as 60% of a full-time employee.

 

If your company has subsidiaries

If your company owns or controls any other companies, they must be qualifying subsidiaries. This means:

  • Your company doesn't control any company that isn't a qualifying subsidiary.
  • Your company owns more than 50% of each subsidiary's shares.
  • Your company isn't controlled by another company, and no other company owns more than 50% of its shares.

Your company must own at least 90% of a subsidiary if either:

  • the business activity you'll spend the investment on will be carried out by the subsidiary
  • the subsidiary's business is mainly property or land management

A subsidiary can be set up to complete a project or series of projects before closing, as long as it supports the growth and development of your company.

 

Applying for EIS on Vestd

Our advance assurance application takes you through the process from start to finish. Each question is explained in detail, and our team review your application before it's submitted to HMRC, to give you the best chance of success.

To get started, go to Investment & Funding > Guided flow in the navigation panel.

 

FAQs

Does the 7 years start from when my company started trading?
 No. For EIS, the 7 years runs from your company's first commercial sale. The rule based on how long your company has been trading applies to SEIS, where your company's qualifying trade must not have been carried out for more than 3 years.

My company is more than 7 years past its first commercial sale. Can it still qualify?
 It may, in two cases:

  • Follow-on funding: your company received its first EIS, SEIS or VCT investment within the 7 years. The new investment must be for the same activities, and the need for it must have been foreseen in your business plan when the first investment was made.
  • Entering a new market: the money is needed to enter a new product market or a new geographic market, and the amount you're raising is at least 50% of your company's average annual turnover over the previous 5 years.

Do the limits include money raised under SEIS?
 Yes. The annual and lifetime limits are combined totals across EIS, SEIS, VCTs and SITR.

Do I need advance assurance before raising investment?
 No, it's optional. But we recommend it, as it tells you whether HMRC considers your share issue likely to qualify before you go ahead.

How do I know if my company is knowledge-intensive?
 Read what is a knowledge-intensive company, or see HMRC's guidance for knowledge-intensive companies.

Where do I start an EIS application on Vestd?
To get started, go to Investment & Funding > Guided flow in the navigation panel.

Need support?

If you have any questions, our dedicated Customer Success team is here to help: support@vestd.com

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Our team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal, tax or financial advice.'

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