Grants and Tax Reliefs for Startup Companies

Posted in Startup, Taxation
SURE Investment

GRANTS

There are grants available for startup companies from Enterprise Ireland (EI) and Local Enterprise Offices (LEOs)

EI

Enterprise Ireland has grants for innovative startups with high growth potential:

  • HPSU Feasibility Study Grant: It offers 70% of eligible expenditure or up to €30,000 for feasibility study costs to evaluate business strategy viability.
  • Pre-Seed Start Fund: It is a €50,000 to €100,000 investment as a convertible loan note instrument for early-stage companies to develop market-ready products. It also includes 10 mentoring sessions and an EI Development Advisor.
  • Innovative HPSU Fund: It provides equity investment of up to €1.2 m for startups developing new high-potential ideas, products or technologies.
  • Innovation Voucher: It gives €5,000 and €10,000 vouchers to assist SMEs in making connections with publicly funded Knowledge Providers to find new opportunities and solve issues.

LEOs

LEOs support early-stage businesses focused on the domestic market with various grants:

  • Feasibility Study Grant: Up to €15,000 for researching market demand for a product or service and its sustainability.
  • Priming Grant: Up to €150,000 to micro start-up businesses within the first 18 months of being set up. Priming Grants are available to businesses with no more than 10 employees.
  • Business Expansion Grant: Up to €150,000 to businesses in their growth phase after the initial 18-month startup period.

LEOs also provide support with

  • HBAN (Halo Business Angel Network): They assist with angel investment and offers guidance on pitching to investors.
  • Business Innovation Centres (BICs): They provide mentorship, workspace and funding for innovative startups.

Intellectual Property Support The IP Start Grant from Enterprise Ireland and LEOs aids startups with costs for protecting intellectual property including trademarks and patents.


TAX RELIEFS

Startup Relief for Entrepreneurs (SURE)

This Revenue scheme for new businesses allows a refund of income tax previously years –  https://parfreymurphy.ie/a-sure-investment/

R&D Tax Credits

From January 1 2024 to encourage innovation a 30% tax credit on qualifying R&D expenditures is available. This credit can be applied against a company’s corporation tax liability or be received if the company is loss-making.

Employment Investment Incentive Scheme (EIIS)

EIIS provides income tax relief for eligible individual investors who buy new shares in EIIS-qualified SMEs for the year in which the investment was made. The standard investment period is four years and investors can claim relief up to €500,000.

Section 486C Tax Relief

New companies may be able to apply for Section 486C tax relief. It is a reduction of Corporation Tax for the first five years trading. A company may be entitled to relief if the CT due is €40,000 or less in a tax year. If the CT due is between €40,000 and €60,000 partial relief may apply. The relief depends on the amount of employer’s PRSI paid. It is a maximum of €5,000 per employee and €40,000 overall.

Capital Gains Tax (CGT)

The standard rate for CGT is 33%, but the Entrepreneur Relief reduces the standard rate of CGT OF 33% rate to 10% on disposals of qualifying business assets up to a lifetime limit of €1m.

A CGT relief was introduced in 2024 for angel investments’ in innovative start-ups, with a reduced rate of 16% (or 18% through a partnership) on qualifying investments, capped at 200% of the investment made, with a lifetime gains limit of €3 million.

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