Irish SMEs call for equivalent of UK's Seed Enterprise Investment Scheme

A group of business leaders representing more than 2,000 start-up companies in Dublin are calling on the Government to introduce an equivalent to the UK’s Seed Enterprise Investment Scheme (SEIS) at the upcoming Budget.

The Dublin Startup Leaders Group believes such a scheme would encourage more investors to back early stage firms with their savings.

The group, founded by the Dublin Comissioner for Startups, Niamh Bushnell, includes representatives from dozens of organisations including the Dublin Chamber of Commerce, the Digital Hub and the Irish Software Association.

In the UK, the SEIS encourages investors to finance ambitious start-ups by providing tax breaks for those prepared to invest in fledgling projects.

SEIS investors receive income tax relief of 50 per cent on a maximum investment of £100,000 and also benefit from 50 per cent capital gains tax relief on any reinvestment of assets in an SEIS qualifying company.

The combined tax reliefs limit the exposure of higher rate taxpayers by up to 22.5 per cent of their investments.

The UK’s SEIS was launched in April 2012 and, since its unveiling, more than 2,700 new and growing companies have obtained investment, raising over £240 million in capital, according to the UK Treasury.

The Dublin Startup Leaders Group believes a similar scheme could “unlock” funding for high growth start-ups, utilising funds that are sitting in the Central Bank waiting for a purpose.

“According to the Irish Central Bank, there is over €98 billion sitting in household short term deposit accounts in Ireland,” said the organisation.

“If a SEIS-type relief was introduced in Ireland, and encouraged investment of even 0.1 per cent of these funds, €98 million of cash would be released for investment into between 600 and 700 startups and create multiple jobs directly and indirectly as a result.”

“Currently the environment in Ireland doesn’t encourage the average man or woman on the street to get involved in investing or startups,” said Bushnell.

“Even if we use one of the smallest percentages that we can imagine it is still already €98m, it is a massive injection of cash.

“Even if it is only taken up by a minimal amount of people it is still a massive opportunity.

“We are starting to see companies move out of Ireland and to the UK earlier as it is easier for them to get early stage funding there.

“If we don’t have an environment that prompts people to set up companies then we will fall behind.”

Date published 20 Jul 2015 | Last updated 20 Jul 2015