Most taxpayers in Ireland hand over a big slice of their income and get no say in where it goes. The Employment and Investment Incentive Scheme (EIIS) flips that. It lets you claim income tax relief on money you invest in qualifying Irish companies, turning part of your tax bill into a stake in a growing business.
Revenue calls it the Employment Investment Incentive, or EII, and the EII scheme replaced the older Business Expansion Scheme (BES) in 2011. Different names, same mechanics: you buy new shares, hold them, and claim tax relief.
How does the EIIS scheme work?
The scheme sits in Part 16 of the Taxes Consolidation Act 1997. Its purpose, per Revenue’s Employment Investment Incentive guidance, is to encourage individuals to provide equity finance to Irish trading companies. You put cash into newly issued shares, and the relief is given as a deduction from your total income for the year of investment.
For an investor paying the 40% higher rate of income tax, the refund is worth up to 40% of the amount invested. Invest €10,000 and your income tax liability could fall by €4,000. And because the deduction comes off total income, it can shelter PAYE earnings, self-employed profits and rental income alike.
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Feature |
Detail |
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What you get |
Income tax relief worth up to 40% of your investment |
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Minimum holding period |
4 years |
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Maximum yearly investment for relief |
€500,000 if held 7 years, or €250,000 if held 4 years |
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Applies against |
Income tax only, not USC or PRSI |
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When relief arrives |
In full in the year of investment, for shares issued after 8 October 2019 |
Who can claim EIIS tax relief?
The scheme is aimed at individual investors, not companies, and the conditions are strict:
- You must pay income tax in Ireland; the relief is worthless without an Irish tax bill.
- The money must be cash for newly issued ordinary shares; buying existing shares from another shareholder does not count.
- Revenue states that you qualify only if you, or your family, do not already own capital in the company; founders and connected directors are generally shut out.
- Each investor must hold the shares for at least four years, or the relief is clawed back.
Are EIIS investments worth it? That depends less on the tax relief rate and more on whether the underlying company survives. The relief softens the risk; it does not remove it.
Which companies qualify for EIIS investment?
The company side matters just as much. Broadly, a qualifying company is an Irish limited company registered with the Companies Registration Office that carries on a qualifying trade and uses the funds raised for growth and employment, such as hiring staff or expanding into a new sector.
- It must be a micro, small or medium-sized enterprise rather than a large established business.
- Certain activities are excluded, so check Revenue’s relief for investment in corporate trades section before assuming a trade qualifies.
- The company must give you a Statement of Qualification confirming the investment meets the rules. No statement, no claim.
Raising EIIS money for your own company? Our guide on how to issue new shares in your company covers the CRO filings; see also our piece on how to go about raising funds. Founders usually cannot claim EIIS on their own business because of the ownership rules, but the SURE scheme covers that situation, and R&D tax credits can sit alongside either.
How do you claim EIIS tax relief?
Revenue sets out the detail on its how to claim relief for shares page, but the journey looks like this:
- Make a qualifying EIIS investment: cash for new ordinary shares, directly or through a designated fund.
- Wait for the Statement of Qualification from the company. You cannot claim without it.
- Claim through Revenue’s online services: myAccount for PAYE taxpayers, or Form 11 through ROS if you are self-assessed. If Form 11 fills you with dread, our tax return service handles it.
- Keep share certificates and payment records in case Revenue reviews it.
Should you invest directly or through an EIIS fund?
An EIIS fund pools money from many investors and spreads it across a portfolio of qualifying Irish SMEs. The fund manager handles due diligence, paperwork and the exit planning and tax strategy, and regulated fund managers answer to the Central Bank of Ireland . Those fees eat into any return.
Direct investment means you pick one company, keep the upside and carry the concentration risk. A fund lets you diversify. Neither route guarantees the relief, and a tax advisor can help you weigh growth potential against your appetite for risk.
What are the risks of an EIIS investment?
This is not a deposit account. Treat it as venture-style investing with a tax sweetener:
- Capital risk: early-stage companies fail, and when they do you lose the money.
- Illiquidity: the shares are unquoted, so you are locked in with no ready market to sell into.
- Clawback: if the company breaches the conditions, or you exit early, Revenue can claw the relief back from the investor.
Citizens Information keeps a plain-English overview of the income tax reliefs available in Ireland if you want to compare EIIS against other options.
What else do people ask about the EIIS scheme?
What does EIIS stand for?
Employment and Investment Incentive Scheme. You will also see it written as the Employment Investment Incentive Scheme, while Revenue shortens it to EII. All three mean the same thing.
Can PAYE workers claim EIIS relief?
Yes. PAYE taxpayers claim through myAccount once they hold a Statement of Qualification, and the relief usually arrives as a refund of income tax already deducted from salary.
How long do I have to hold an EIIS investment?
At least four years. To claim relief on the higher €500,000 annual cap, you must hold the shares for seven years. Sell early and expect a clawback.
Is the tax relief guaranteed?
No. If the company stops qualifying after you invest, or you break a condition yourself, the relief can be restricted or withdrawn. That is why due diligence matters.
Want help with your EIIS claim?
We prepare income tax returns for investors, directors and business owners across Ireland. Whether you are weighing an investment for the 2026 tax year or never claimed relief on a 2025 investment, make sure you understand the <a href=”/target”>business tax filing deadlines Ireland</a> — then get in touch today and book a consultation .
Disclaimer: This guide is for general information purposes only and does not constitute professional advice. Speak to a qualified accountant about your specific circumstances before acting on anything covered here.