From 6 April 2026, the Enterprise Investment Scheme has doubled its key thresholds. Most of the commentary has focused on UK domestic companies. Almost nobody is writing about what the changes mean for Israeli, American and European tech companies with UK operations — and that’s where the real opportunity sits.
This article is for general information purposes only and does not constitute legal, tax or investment advice. Tax treatment depends on individual circumstances and may change. Readers should consult their own professional advisors before acting on any of the information discussed.
If you are a founder, CFO, or investor in a technology company that either operates in the UK or is considering establishing a UK presence, the changes to the Enterprise Investment Scheme that took effect on 6 April 2026 are the most significant development in UK tax-efficient fundraising in over a decade. They have been widely reported in the UK accountancy and tax press, but almost exclusively from the perspective of domestic UK companies and their investors. What has been largely missed is the cross-border angle — and for companies headquartered in Israel, the United States, or continental Europe that have UK holding structures, UK subsidiaries, or UK branches, the changes are potentially transformative.
I have spent thirty years advising technology clients on cross-border corporate transactions, including numerous Israeli technology companies that have established UK holding companies and branch operations. Many of these have successfully raised EIS-qualifying investment. The April 2026 changes significantly expand the pool of companies for which this route is viable, and understanding exactly how requires a cross-border lens that most of the existing commentary hasn’t provided.
What actually changed on 6 April 2026
The changes fall into three categories, and all of them point in the same direction: more companies can qualify, they can raise more money, and they can stay eligible for longer.
The gross assets threshold has doubled. Previously, a company needed gross assets of no more than £15 million immediately before issuing EIS shares, and no more than £16 million immediately after. From 6 April 2026, those thresholds have increased to £30 million and £35 million respectively. This is the headline change. A significant number of Series A and Series B technology companies — both UK-headquartered and foreign companies with UK structures — that were previously too large to qualify are now comfortably inside the EIS window.
Annual and lifetime fundraising limits have doubled. The annual amount a company can raise under EIS has increased from £5 million to £10 million. The lifetime limit has increased from £12 million to £24 million. For Knowledge Intensive Companies — a designation that captures many technology, biotech and deep-tech firms — the annual limit has risen from £10 million to £20 million and the lifetime limit from £20 million to £40 million. These are substantial numbers. A KIC can now raise up to £40 million over its lifetime through EIS-qualifying investment, which is enough to fund a company from seed through multiple growth rounds without ever leaving the scheme.
The wider tax environment has shifted in ways that make EIS relatively more attractive. VCT income tax relief has been cut from 30% to 20%, creating a clear 10-percentage-point advantage for EIS, which retains its 30% relief. Capital gains tax rates have risen to 18% for basic-rate taxpayers and 24% for higher-rate taxpayers, increasing the value of EIS capital gains deferral relief. Business Property Relief for inheritance tax has been capped, and pensions are being brought within the IHT scope from April 2027. The combined effect is that investors are actively looking for tax-efficient alternatives, and EIS is now the most attractive game in town.
The scheme has been extended through 2035, removing the uncertainty that previously made long-term planning difficult for both companies and investors.
What this means for UK domestic companies
For UK-founded and UK-headquartered technology companies, the implications are straightforward and have been well-covered elsewhere. Companies that previously outgrew EIS eligibility can now re-enter the scheme. Companies approaching their previous lifetime cap have significant additional headroom. Companies planning future funding rounds can structure them with confidence that the scheme will be available for another decade. The expansion from start-up support to genuine scale-up support is the most important policy shift in the UK venture capital landscape since EIS was created in 1994.
The practical effect is already visible. Companies with gross assets between £15 million and £30 million — broadly, later-stage Series A and Series B businesses — that were locked out of EIS as recently as March 2026 are now eligible. For investors in these companies, the 30% income tax relief, capital gains exemption on disposal, capital gains deferral relief, and potential inheritance tax benefits through Business Property Relief make EIS-qualifying shares significantly more attractive than non-qualifying equivalents. In an environment where CGT has risen and VCT relief has fallen, this matters more than it did a year ago.
The cross-border angle nobody is writing about
Here is where the existing commentary stops, and where the more interesting conversation begins.
The EIS is not restricted to UK-founded companies. A company can qualify for EIS provided it meets the relevant conditions, which include carrying on a qualifying trade, having a permanent establishment in the UK, and satisfying the gross assets, employee count, and age requirements. The company does not need to be founded in the UK, and its founders do not need to be UK residents. What matters is the structure.
In practice, this means that an Israeli cybersecurity company, an American SaaS business, or a European deep-tech firm can establish a UK subsidiary or holding company, raise EIS-qualifying investment through that entity, and use the proceeds to fund UK-based operations — including research and development, sales, and in some cases manufacturing — while the core technology continues to be developed in the company’s home market. The UK entity must carry on a genuine qualifying trade and must meet the permanent establishment requirements, but within those boundaries, the structure is entirely legitimate and has been used successfully by numerous foreign technology companies for years.
What the April 2026 changes do is dramatically expand the universe of foreign companies for which this route makes sense. Previously, the £15 million gross assets threshold meant that only relatively small foreign companies could qualify — by the time a company had raised a meaningful Series A or B, it was often already too large. The new £30 million threshold brings a much broader range of international companies into scope, including those at exactly the growth stage where UK market entry is most strategically valuable.
For Israeli technology companies specifically, this is particularly significant. The UK is already a natural market for Israeli tech — the legal system is familiar to Israeli lawyers who trained in common-law jurisdictions, the language barrier is minimal, the customer base is sophisticated, and London’s position as a financial centre creates a concentration of potential investors who understand the EIS scheme and actively seek EIS-qualifying investment opportunities. Many Israeli companies already have UK holding structures or UK branches for commercial reasons. The April 2026 EIS expansion means that many of these companies — which were previously too mature to qualify — can now access EIS funding for the first time.
The same logic applies to American companies entering the UK market and to European companies establishing UK post-Brexit beachheads. In each case, the question is whether the company’s UK structure meets the qualifying conditions, and the April 2026 changes have made meeting those conditions significantly easier.
The Knowledge Intensive Company designation
One aspect of the EIS changes that deserves particular attention from technology companies is the Knowledge Intensive Company (KIC) designation. KICs benefit from higher limits across the board — £20 million annual, £40 million lifetime, and up to 500 employees rather than 250. The qualification criteria broadly require the company to be carrying on research, development or innovation, or to have a high proportion of employees with relevant advanced qualifications.
Many technology companies — particularly those in cybersecurity, AI, biotech, cleantech and deep-tech — will naturally qualify as KICs without any restructuring. For these companies, the April 2026 changes are even more generous than the headline figures suggest: a lifetime EIS fundraising capacity of £40 million, raised at 30% income tax relief for investors, with full CGT exemption on disposal and potential IHT benefits. That is a genuinely powerful fundraising proposition, and it is available to any qualifying company with a UK permanent establishment — regardless of where the company was originally founded.
The practical steps
For companies — whether UK-headquartered, Israeli, American or European — considering whether they can benefit from the expanded EIS regime, the practical steps are broadly as follows.
First, assess eligibility. The qualifying conditions are detailed and fact-specific. The company must carry on a qualifying trade (certain trades, including financial services, legal services, and property development, are excluded). It must have a UK permanent establishment. Its gross assets must not exceed the new £30 million threshold before the share issue. It must have fewer than 250 employees (500 for KICs). And the shares must be new ordinary shares, fully paid in cash.
Second, for foreign companies without an existing UK structure, consider whether establishing a UK subsidiary or holding company makes commercial sense independently of the EIS opportunity. EIS should enhance a commercially sound UK strategy, not be the sole reason for creating one. If the UK market is genuinely part of the company’s growth plan, the EIS-qualifying structure is a powerful additional incentive. If the UK market is an afterthought, the tail should not wag the dog.
Third, obtain advance assurance from HMRC. Companies can apply to HMRC for advance assurance that a proposed share issue will qualify for EIS relief. This is not mandatory but is strongly recommended, particularly for cross-border structures where the eligibility analysis is more complex. Advance assurance gives both the company and its investors confidence that the relief will be available, and is typically obtained within a few weeks.
Fourth, structure the investment round correctly. EIS-qualifying shares must be new ordinary shares issued for cash. The structuring of the round — including any interaction with existing share classes, investor rights, and anti-dilution provisions — needs to be handled carefully to preserve EIS eligibility. This is an area where experienced legal advice is essential, particularly for cross-border rounds where the company may be simultaneously raising from EIS-qualifying UK investors and non-UK investors on different terms.
Why this matters now
The April 2026 EIS changes are not just a technical adjustment to an existing scheme. They represent a fundamental expansion of the UK’s tax-efficient investment infrastructure at a moment when the wider tax environment is pushing investors actively toward EIS. The doubling of thresholds, the VCT rate reduction, the CGT increases, the IHT changes, and the scheme extension through 2035 together create a window of opportunity that did not exist six months ago.
For UK technology companies, this is an invitation to raise more capital on better terms for longer. For foreign technology companies with UK operations or aspirations, it is an invitation to access a fundraising mechanism that most international founders do not know exists. And for investors — both UK-resident angels and institutional investors — it is a recalibration of the risk-reward equation that makes early-stage and growth-stage investment in qualifying companies materially more attractive than it was before 6 April.
The companies that move quickly to understand the new rules, assess their eligibility, and structure their next round accordingly will have a meaningful advantage over those that discover the opportunity six months from now. The window is open. The thresholds have never been higher. And the scheme has never been more relevant to the cross-border technology landscape that I have spent thirty years working in.
David Cohen is the editor of Crosswinds Daily. He qualified at Cambridge University in 1988 and has practised since the early 1990s as both an English solicitor and an Israeli lawyer, advising technology clients on cross-border corporate and commercial transactions. In his practice he has advised numerous Israeli technology companies on establishing UK holding structures and raising EIS-qualifying investment. He is Head of Global BizDev at Shepha, an India market entry and business development firm. Inbound enquiries can be directed through crosswindsdaily.com/contact or via LinkedIn.
This article is for general information purposes only and does not constitute legal, tax or investment advice. Tax treatment depends on individual circumstances and may change. EIS investments are high risk and illiquid. Capital is at risk and investors may lose some or all of their investment. Readers should consult their own professional advisors before acting on any of the information discussed.
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