To qualify for SEIS, an investment must be made in which type of entity?

To qualify for the Seed Enterprise Investment Scheme (SEIS), an investment must be made in a start-up company. SEIS aims to stimulate growth among small and early-stage businesses by providing tax reliefs to investors who invest in them. To fall under this scheme, a company must meet specific criteria, including being a new business, typically starting trading in the last two years. This structure encourages investment in innovative and high-risk ventures, which are generally more challenging to fund through traditional means.

Charity organizations do not qualify for SEIS since they operate under different regulations and funding mechanisms focused on not-for-profit activities rather than generating returns for investors. Governmental agencies are also not eligible, as SEIS is intended for private sector enterprises that are looking to grow. Similarly, an existing corporation that has been in business for more than five years does not qualify; the SEIS is specifically for start-ups to ensure that the investments are directed to the earliest stages of business development. Thus, the requirement for a start-up company as the qualifying entity is fundamental to the SEIS framework.