Ireland Launches Angel Investor Relief Scheme for Start-ups

On March 3, the Minister for Finance of Ireland Paschal Donohoe informed on the commencement of the Relief for Investment in Innovative Enterprises (Angel Investor Relief). The measure is a Capital Gains Tax (CGT) relief for individuals who invest in innovative start-up SMEs, in order to make Ireland more attractive for business angel investors. It is a form of state aid which will operate in compliance with the General Block Exemption Regulation (GBER) and the Finance Act 2023.

The relief will help new innovative companies seeking funding and encourage investors to acquire shares in these innovative companies. The relief offers a reduced rate of CGT of 16% for individual investors, or 18% in the case of an investment via a qualifying partnership, on the sale of that investment to a third party (as compared to the general rate of 33%). The reduced CGT rate is available on a gain up to a maximum of twice the value of the investor’s initial investment.

A company may apply to Revenue (Irish Tax and Customs Service) to receive certificates of qualification, including a certificate of commercial innovation.

To be eligible for the relief, the following criteria must be met:

– Investees should be innovative start-ups (less than 5 years old) and SMEs in their organizational form (up to 250 employees; annual turnover not exceeding €50 mln).

– Shares have been held for at least three years from the date of investment.

– Fully paid up newly issued shares reach at least €10,000.

– Shares constitute 5%-49% of the ordinary shares.

Press release of the Department of Finance