Enterprise Investment Schemes (EIS) are one of the most exciting investment products on the market. They offer an opportunity for savvy investors to get access to some of the most promising businesses in the world pioneering development in key sectors. For those who aren’t familiar with the term, an EIS is a scheme that operates as a partnership between investors and a company. Let’s take a look at what is an EIS fund is and why it’s such an exciting way to invest.
What Is An EIS Fund?
An EIS fund is a type of fund that operates like a partnership between investors and a company. The fund is made up of investors who contribute money to the company in return for an equity stake in the company. This means that an EIS fund is not just an investment; it’s a way for companies to get funding and for investors to make money.
How Can I Buy EIS Investments?
To buy an EIS investment, you can either invest directly with an investment manager or work with a broker or financial advisor. You will then have the opportunity to purchase shares of an EIS fund for a set price. An EIS fund is advantageous because it offers investors the chance to take advantage of small-to-mid-sized businesses that might not be on their radar otherwise. After all, these businesses are often overlooked by larger firms looking for a bigger return on their investment.
By investing in an EIS, you have the opportunity to earn a good rate of return on your investment and help fuel the growth of promising companies. If you’re interested in learning more about EIS investment opportunities and how you can add this exciting investment to your portfolio, head over to Oxford Capital. At Oxford Capital, you can learn everything you need to know to get started with an EIS investment.
Tax Relief For Investing In Early-Stage Businesses
The whole point of an EIS fund is to invest in an early-stage business; these are businesses that have just started or are starting out. By getting involved in early-stage investing, you have the potential to make much larger returns than if you were to invest in established businesses. EIS funds also offer tax relief for your investments (depending on your personal circumstances).
If you’re investing in an EIS fund, there are multiple tax benefits you can enjoy, such as income tax relief of up to 30%, capital gains deferrals, and loss relief on exit. It should be noted that as the businesses are in their infancy, there carries a certain degree of risk that must be considered. However, loss relief is another benefit – if your EIS investments don’t perform well, you can offset any losses against other income or gains.
Wide Range of EIS-Eligible Investments
Investing in an EIS fund provides investors with the opportunity to support growing British companies (often within innovative tech sectors), in order to stimulate growth for the economy. Choosing an EIS Investment helps support innovation in leading industries such as fintech, digital health and digital marketplaces to name a few.
There are many benefits of the scheme which are well worth looking into. Ensure that you are focusing on a range of different EIS-eligible investments in terms of sectors that you may be personally interested in or are trending upwards so you can track their growth going forwards.
Importance of Diversification
While EIS-focused opportunities offer attractive benefits, they shouldn’t be the only investment that you put your attention towards. No investor would solely focus on EIS opportunities, as they will want to maximize their chances of success by diversifying their investment portfolio. For example, the property remains an attractive investment opportunity, especially if you can rent it out for residential or commercial reasons.
This would supply you with income each month that allows you to build your portfolio. Look into a range of investment opportunities that aren’t just EIS-focused, so that you can increase your chances of success and ensure you’re protected against any potential losses or crashes in the market.