Ireland Fact-File Part 5:
Small Business Incentive Programs
5.1 Ireland Small Business Support Schemes
Government and municipal incentive programs for small
business
There are a significant number (38 at the time of writing)
of what is known as ‘Area Partnerships', funded by Area Development
Management (an intermediary company established by the Irish
Government, in agreement with the European Commission) as
part of its Local Development programme for disadvantaged
areas. These Area Partnership companies provide various types
of support to small businesses, including providing assistance
to expand and update their operations.
Business start-up schemes
Various programs exist to support small business start-ups.
These are as follows:
Revenue Job Assist, claimed by completing form RJA1 (part
1 by the employee, and part 2 by the employer), allows small
businesses employing workers who have been unemployed for
12 months or more, or single parents who have been similarly
unemployed, to claim a double deduction with regard to wages
paid to the employee, and employer PRSI contributions.
The Employers PRSI Exemption Scheme affords a small business
employing a worker in receipt of Back to Work Allowance as
a result of his/her work with the company a two year exemption
on paying employer PRSI contributions. Inclusion in the Scheme
is automatic (as soon as the employee is awarded the Back
to Work Allowance (BTWA), the employer will be contacted by
the Department of Social and Family Affairs, and once the
employer has submitted a current Tax Clearance Certificate,
the Exemption Certificate will be issued for a two year period),
and there are no limits to the number of employees able to
benefit under this scheme.
County and City Enterprise Boards offer a number of support
schemes for small business startups in Ireland, primarily
where the business employs less than ten people, and is in
the manufacturing or service sector.
Capital grants of up to EUR75,000 for the purchase of machinery
and equipment may be available (although it has been required
since 2000 that a percentage of each board's assistance be
refundable, so repayment of the grant may be required in some
cases).
CEBs may also offer support via a Redeemable Preference Share
Scheme, whereby the CEB holds preference shares (redeemable
at a later date, and which allow the Board no voting rights)
in the small business, providing capital support for companies
seeking to attract equity investment for the first time.
Employment Grants are also provided by County and City Enterprise
Boards to offer assistance with regard to labour costs, thereby
supporting job creation in new and expanding projects. Up
to EUR7,500 for each job, up to a maximum of 10 jobs, may
be provided to qualifying projects.
In order to qualify for such aid, a small business
must demonstrate that it will be adequately funded overall,
that the project is in the commercial sphere, and within the
manufacturing or internationally traded services sector (a
term which usually refers to the provision of consultancy
services), that there is a market for the product or service
in question, that the business has the technical capacity
and personnel to undertake the project, and that it will create
new direct employment.
New or expanding projects where the market is
already saturated, to a certain extent (meaning that the jobs
created by the new project would lead to jobs being lost elsewhere),
agricultural production, retail or sales-related projects,
projects in sectors already receiving assistance, projects
which run against national policy, or are in areas deemed
‘sensitive' by the government or the European Union will not
qualify.
In addition, feasibility grants (at between
EUR5,100 and EUR7,500, depending on location) are also sometimes
granted by CEBs to support pre-start-up studies to assess
market interest in a proposed new product or service, how
appropriate the associated funding plans are, and the viability
of the project initially, and its long-term sustainability.
Updated in
December 2010 In
the austerity budget, delivered in December 2010, it was announced
that a scheme granting corporate income tax and capital gains
tax exemptions (up to EUR40,000) for qualifying small start-ups
during their first three years of trading from 2009 and 2010
would be extended to 2011, but would be limited to the equivalent
of EUR5,000 employer PRSI liability.
Support programs for bank lending
There are no government or municipal schemes to assist or
guarantee bank lending to the owners or operators of small
businesses as such.
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