Enterprise Investment Schemes

The Enterprise Investment Scheme (EIS) is a UK Government scheme set up to encourage investment into small companies. It provides a range of tax reliefs for investors who subscribe for qualifying shares in qualifying companies.


First launched in 1994, the EIS was established to provide funding to early-stage businesses with high growth potential. Since the scheme was launched, almost 53,000 companies have received investment, totalling nearly £30 billion of SME funding (EISA, May 2023). Such investment has helped create new jobs and stimulate innovation and growth throughout the UK.

The popularity of EIS has increased in recent years – fuelled in part by a more mature EIS market but also because an increasing number of individuals are looking for estate planning above the nil rate band for Inheritance Tax. Any investment into EIS-qualifying shares will benefit from several tax benefits, but unlike VCTs, investments into an EIS scheme will normally not be treated as ‘relevant business property’ for the purposes of IHT and are entitled to up to 100% relief from IHT. To learn more about business relief, please review our IHT planning section.

Ways to invest

There are three main ways to invest in an EIS:

Direct Investment: This involves identifying an individual qualifying company and investing directly into it. This route requires significant due diligence on the part of the investor and a deep understanding of the market the company operates.

Through an EIS Fund or managed portfolio service: these managed funds and services pool investor money to invest in a portfolio of EIS-eligible companies. Funds and services are typically run by experienced managers who identify and manage investments.

Through a Syndicate or Angel Network: These are groups of individual investors who pool their resources to invest in businesses. They often have industry expertise and can provide added value beyond the investment.

The type of companies that qualify for EIS

Investment into the EIS scheme has been designed to channel funds to those companies that need it most. There are, therefore, quite strict criteria that govern which companies qualify for EIS funding and which don’t. To qualify for EIS, companies must meet the following criteria:

Be unlisted: The company can't be listed on a recognised stock exchange at the time of the investment; however, EIS-qualifying companies can be quoted on AIM.

Size of the Company: The company must have fewer than 250 full-time equivalent employees.

Age of the Company: Generally, the company must be less than seven years old if it's raising more than £12 million.

Gross Assets: The company must not have gross assets of more than £15 million before the investment and £16 million immediately after the investment.

Purpose of Investment: The investment must be used for a qualifying business activity, typically a trade carried on with the intention of making profits. Certain activities, such as banking, farming, and property development, are excluded.

UK Establishment: The company must have a permanent establishment in the UK.

They are often in sectors such as technology, biotech, green energy, and other high-growth potential sectors. However, they can also be in traditional sectors that are innovating and expanding.

Key benefits of an EIS investment

Supporting Innovation and Growth: By investing in an EIS, you're supporting SMEs, which are often innovative and high-growth companies. This can potentially lead to high returns.

Tax Efficiency: As outlined above, EIS investments come with several tax reliefs, which can significantly reduce the effective cost of investment.

Potential High Returns: Given the risk profile, if an EIS company does well, the return on investment can be very high.

Open EIS offers from Puma Investments

Puma Alpha EIS


Raised by our EIS funds


Growth-oriented investment

Join our Alpha investment strategy focused on growing UK businesses with strong management teams. Benefit from up to 30% income tax relief, potential tax-free capital gains, and the opportunity to support innovative UK businesses.

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You can invest up to £1 million in each tax year and receive income tax relief. This limit is extended to £2 million, provided that any amount over £1 million is invested in knowledge-intensive businesses.

To benefit from the income tax reliefs and capital gains tax exemption, you need to hold the shares for at least three years from the date of issue. To benefit from the IHT exemption, you need to hold shares for at least two years from the date of investment in qualifying shares and at the point of death.

Depending on the provider, you may be able to, although you will not be able to take advantage of the tax reliefs. Puma Investments does not accept applications from investors who are not UK residents. 

You are able to invest in an EIS-qualifying company through a company or trust. However, you will not qualify for the tax reliefs that an individual may receive. 

Yes, but the person you transfer them to will not be able to claim any EIS reliefs.

No, EIS shares cannot be held in an ISA.

EIS opportunities can be found through EIS funds, syndicates, angel networks, crowdfunding platforms, and direct through companies themselves. It’s crucial to perform due diligence or work with a financial adviser when considering EIS investments.

You cannot claim EIS relief if you are connected to the company by holding more than 30% of the shares, voting rights, or have been an employee or paid director of the company. However, there are exceptions for unpaid directors.

Yes, you can choose to ‘carry back’ all or part of the investment to the preceding tax year, provided there is unused EIS allowance for that year. This effectively allows the income tax relief to be applied to the previous year’s tax liability. EIS investments differ from VCTs here. VCTs do not allow you to carry back income tax relief.

If the company fails, you can claim loss relief. This can be offset against either your capital gains tax or income tax, in the year the company fails.

Risk Factors

You can only invest in Puma Alpha EIS through a Financial Adviser who has assessed that an investment is suitable for you. An investment in Puma Alpha EIS carries risk and you should read in full the Puma Alpha EIS Investment Details. Below are the key risks:

General: Past performance is no indication of future results and share prices and their values can go down as well as up. The forecasts in this document are not a reliable guide to future performance.

Liquidity: It is unlikely there will be a liquid market in the shares of the EIS-qualifying companies and it may prove difficult for investors to realise their investment immediately or in full.

Capital at risk: An investment in Puma Alpha EIS can be viewed as high risk. Investors' capital may be at risk and investors may get back less than their original investment.

Tax reliefs: Tax reliefs depend on individuals' personal circumstances, minimum holding period and may be subject to change.