European Commission aid approval for the extension and amendment of the Business Expansion Scheme and Seed Capital Scheme

10 September, 2007

The Tánaiste and Minister for Finance, Mr. Brian Cowen T.D., announced on the 29th of August that State aid approval has now been received from the European Commission for the extension and amendment of the Business Expansion Scheme (BES) and the Seed Capital Scheme (SCS).

The Tánaiste noted that the approval received, after a careful and professional examination by the Commission, is subject to a number of conditions and a small number of amendments to the legislative provisions governing the schemes will be necessary. The Minister intends to bring forward shortly the necessary amending provisions. Full details will be set out in a Regulation but the changes will provide that from 1 January 2007:

• Small & medium-sized enterprises may qualify if they are located in assisted areas (currently includes all counties except Dublin, Meath, Kildare and Wicklow, as defined under EU State aid guidelines). In non-assisted areas (currently counties Dublin, Meath, Kildare and Wicklow) they will qualify only for seed capital or as start-ups.
• In order to comply with EU rules on the cumulation of State aids, a company that raises finance under the BES and/or the SCS will have the level of other State aids affected (with the exception of grants for research and development).

The Tánaiste also increased the amount of money that firms can raise through the scheme to €2 million, up from the previous limit of €1 million. The higher limit is subject to a maximum of €1.5 million being raised in any one 12-month period.

The necessary Regulation and Commencement Order has been signed by Minister Cowen on the 6th of September, bringing the schemes into effect from 1 January 2007 with an expiry date of 31 December 2013 in line with the Commission approval.