SEIS vs EIS | what is the difference?

by | Jan 15, 2021 | SEIS, EIS

Would you like to raise investments for your startup but don’t know which investment scheme can be right for you? in this article we will tell you about the game of SEIS vs EIS, so that you can have all the information you need to reach your business goals in the shortest possible time.

At present, it is almost impossible to boost a startup without the financial and operational support of investors. In the corporate world of the new century, it is necessary to incorporate tools such as SEIS or EIS, to encourage and attract investment from external investors, especially if you want to be successful with your startup in the long term. 

In the following article, we will not only explain the definition of these two investment plans, but we will also talk about the difference between SEIS vs EIS.

What is known as SEIS? 

The SEIS, or better known as the “Seed Enterprise Investment Scheme”, is an investment plan that was developed around the year 2012, and was designed to work in those companies that are taking their first steps.

The investment plan aims to reduce the high financial risks in start-up companies, where only the most experienced and enterprising investors have the capacity to overcome the setbacks.

However, those startups that have only operated for a maximum of 2 years, have assets not exceeding £200,000, and have a maximum of 25 employees; they can aspire to implement the Seed Enterprise Investment Scheme (SEIS).

If you want to go deeper about what SEIS is and how it works, we suggest you read our previous article.

What is known as EIS?

For many entrepreneurs and finance experts, the EIS is considered an evolved version of the SIES. The EIS is also an investment plan and is called the “Enterprise Investment Scheme”.

Unlike its counterpart, this investment plan was developed to work in larger companies with more sophisticated operational and financial structures.

This means that the Enterprise Investment Scheme is implemented in those unlisted startups that seek to encourage and promote large investments.

For a company to be able to implement an investment plan of this caliber it must not be operating for more than 7 years, its assets must not exceed £15 million, and it must have a staff of fewer than 250 people.


We have mentioned some of the characteristics of both investment plans above, but below we will explain some of the differences between SEIS vs EIS, which you should take into account before making any decision that affects your company.

  • Tax relief: for those companies that wish to implement the SEIS, the tax relief is a maximum of 50%. On the other hand, for companies that use the EIS, the tax relief is 30%.
  • Investment limits: For companies using the EIS, investors can only invest a maximum of £1 million or a maximum of £12 million over the lifetime of the company. In the case of SEIS, the maximum investment is £100,000, with a lifetime limit of £150,000.

With both investment plans, investors do not have to pay any tax rates for the inheritance of shares that have been held for at least two years.

On the other hand, if a company’s shares are sold with significant financial losses, investors can offset these losses through a capital gains tax (CGT) on the company. This is a useful way to protect investors’ interests, especially in large startups.

Benefits of SEIS vs EIS

Benefits of SEIS

Once you know the most important differences between the SEIS vs EIS, it is time to learn about some of the benefits that these investment plans can bring to companies. According to the UK Government’s article about SEIS Let’s start with the benefits of the Seed Enterprise Investment Scheme.

  • The tax relief is 50% of the amount invested.
  • Investors can cancel the CGT of 50% of the total amount they invested in the company, as long as it was in the same fiscal year
  • The shares are tax-free, only if they are held for at least 2 years in a row.
  • If investors have held shares for at least 3 years, they can enjoy CGT exemptions on the proceeds of any sale of shares.

Benefits of EIS

Now that we have determined the differences between SEIS vs EIS, and talked about the benefits of SEIS, it is time to talk about the benefits of EIS.

  • As with the SEIS, investors who acquire shares for at least 3 years can also enjoy CGT exemptions on any profits made from the sale of their shares.
  • As the EIS is applied to large startups, investors have the possibility to defer 100% of the total amount invested against any capital gains tax or CGT.
  • On the other hand, investors can recover a high percentage of the entire amount invested in the company, one year after they have invested.
  • As with the Seed Enterprise Investment Scheme, with the EIS, investors can enjoy tax-free shares, only on the condition that they have been held for at least 2 years.


Here are some tips that may be useful when implementing any of these investment plans.

  • With both the EIS and the SEIS, companies can raise money; however, it is of utmost importance that both plans are not implemented at the same time.
  • Investors’ participation, in respect of shares, may not exceed 30%; especially when it comes to qualifying for tax relief. This rule must be applied to both investment plans.
  • It is advisable that startups first ensure that they receive the money or investment from investors before issuing shares in the company.

Tools to be used efficiently 

In addition to talking about SEIS vs EIS and the differences between the two investment models, it is important to talk about the role of these investment plans.

Many companies or entrepreneurs are often confused about the methods of implementing SEIS or EIS, and therefore make mistakes that end up affecting their companies. 

These investment plans were designed to promote the development and growth of companies by attracting capital from external investors.

On the other hand, in recent years, both investment plans have experienced changes in their implementation and development rules, which can affect different aspects in the market, especially in companies that are taking their first steps.

Knowing the differences between SEIS vs EIS is fundamental, but understanding that these investment plans must be used to expand the number of employees, innovate in new products or services and expand the company’s brand through marketing, is essential to success, no matter what type of investment plan is implemented in the company. 

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