SEIS the Tax-Free Investment Opportunity for UK Investors

Enterprise Investment Schemes

An EIS is an investment vehicle that provides funds and capital to small businesses that, due to the tightening of the credit market, cannot otherwise get financing from traditional sources. An EIS is an unquoted company that is not on a stock exchange and is most likely managed by a venture capital firm. These firms manage the investment objectives to protect investors and maximize investment returns. A good firm will have been involved in venture capital investing for a number of years and be able to provide a solid track record of protecting principle and securing returns. Firms operate their EISes differently, some offering investments into single companies while others operate EIS funds in which you could invest into a fund of multiple companies, therefore diversifying your risk.

The benefit of tax protection that EISes offer has resulted in an increased demand among wealthier investors, with EIS being utilized as a strategic tool within their portfolios. The UK government increased tax relief from 20% to 30% and the annual investment amount has been increased from £500,000 to £1,000,000. With the added benefit that the investment is exempt from capital gains tax and inheritance tax, EIS is increasingly the perfect vehicle for certain investors. More and more EISes have become essential within many investment portfolios as an integral tax relief tactic.

Seed Enterprise Investment Schemes

Not quite as large as the EIS, the SEIS provides a similar benefit and experience. The main difference being the investment amount allowed annually which currently stands at a maximum of £100,000, but offers an unprecedented 50% tax relief on the investment’s gains and value. However this 50% is only applicable if the SEIS continues to comply with the SEIS rules and providing the investment is left for a minimum of three years. After three years the investor can sell their stake, incurring no capital gains tax against profit realized. Furthermore, loss relief applies to any losses incurred.

As of 2014, the upfront tax relief for the highest tax bracket investors equates to a 64% tax break and, when combined with a loss relief tax break of a further potential of 22.5%, equates to a total of 86.5% tax relief. The downside tax protection of almost 90% is unprecedented amongst all other investment vehicles and provides significant tactical value to certain investors.

Careful Consideration

As with any investment decision, you need to be careful in your consideration when choosing to use EIS or SEIS for your portfolio. You should be considering these tax relief options in your portfolio after you have exhausted other forms of tax mitigation. The first two that should be utilized are your pension and annual Individual Savings Account (ISA) allowance. These primary tax savings vehicles provide secure investment vehicles; ISAs offer amazing investment flexibility not available through EIS or SEIS. Another option includes VCTs – Venture Capital Trusts – which have similar strategic benefits to EIS or SEIS but are limited to £200,000 per year.

In deciding on further tax mitigation, you need to consider the portion of your portfolio that these tactical investments would make up. Conventional wisdom dictates that you should not put more than 20% of your holdings into risky opportunities, but that 20% could realistically be surpassed with correct use of the right investment vehicles. If you are hedging your portfolio against a known event that will increase your capital gains taxes or inheritance taxes, EIS and SEIS would be a viable way to mitigate those taxes in a given year. In this way you could max out your contributions to these two tactical strategies in order to mitigate the known tax implications from another portion of your investment portfolio. It is these considerations that you should be aware of before deciding on a specific EIS or SEIS company.

Another concern that you should be aware of is the fact that EISes and SEISes are essentially “locked-in” products. You need to be able to leave the investments locked in for a period of at least three years (and in some cases longer) in order to access the tax relief benefits – managers will generally look for an exit in or around year 4, but an exit could realistically take longer and is subject to market conditions. In this way, many EIS and SEIS companies are illiquid and the secondary market for selling EIS/SEIS shares is therefore small. Taking the long view on these investments should be a natural consideration.

Choosing the Right EIS/SEIS

When deciding on the right company to invest for the purpose of tax mitigation, not all EIS/SEIS companies are the same. Choosing a company should not be done on impulse and requires effective due diligence to ensure that their investment philosophy is in line with your own. At the time of consideration, ask all the same questions of the company as you would when investing in any stock. By ensuring the company has a solid and proven track record of investments, open reporting functions that promote transparency and an investment philosophy you agree with, you can feel comfortable with your investment.

By considering an EIS/SEIS investment you are considering an investment option that has a real potential for investment loss. It can be the right option for those looking for a high risk option with an effective tax mitigation strategy as a small portion of their overall portfolio. EIS and SEIS investments can also be an excellent way for investors to dabble in venture capital investing without having to put up too much capital.

Considerable Factors Involved in Product Creation & Marketing

The niche you have chosen should allow creation of more than one product or service. With the technological advancements in the hosting industry, from automated control panels and scripts that simplify creation of accounts, to complete turnkey solutions; there is no need to worry about spending time on the real products sold to the customer. The main ones are keyword selection, sales copy principles, graphics, affiliate programs, product creation, online payment processing, auto responders, and search engine optimization.

Once you’ve earned money from this type of information product business, you can invest in the creation of your own products if you want, or start offering more informational products that allow you to sell your knowledge. But the creation and production costs of a similar big ticket in sequence product, although higher, are still pretty low. A key by-product of this process will be the creation of 3-D, Computer Assisted Design art.

The Association for Financial Professionals permits the following activities for repatriating funds: Research and Development activities, advertising and marketing programs, hiring and training new recruits, acquiring patent and other rights to intangible property, improving transportation, funding capital investments with the purpose of job creation and job retention & funding product responsibility or environmental claims.

It prohibits certain activities like: Tax payments, Payment of executive recompense, Payment of dividends, Redemption of stocks, Debt investments and Portfolio investments. Therefore, before repatriating the money, you must consider whether it is worth or not.

Checklist on what artist and product development necessitate includes: Exceptional vocals, musicianship and/or songwriting skills, Continued education and enhancement of musical skills, Quality equipment, Performance ability, Image creation and maintenance, Plan of action, goal setting, excellent promotion materials including photographs, press releases and artwork, Business management skills, Marketing, Publicity and Promotion knowledge, Online and Offline Professional management, Basic knowledge of recording, producing, engineering, and mastering, Basic knowledge of manufacturing, distribution, and sales online, brick and mortar and air-play, Good choices in members, staff and advisors, Physical and mental preparedness, Basic knowledge of finances, accounting Law and legal issues etc.

The goals for doing so are for the product owner to: Communicate the whole, Determine and communicate when releases are needed, Determine what functionality is sufficient for each release & focus on business value derived from the releases. The delivery team on the other hand will see the whole, learn about the steps to realize the vision, learn the business priorities, provide technical input to the roadmap and provide estimates for the projected features. The salesperson must lead the prospect through the various decision criteria needed in order to secure a sale. Whether your idea is the development of a product, launch of a service business, or even the creation of an event or program for a non-profit, creativity is the root of all entrepreneurial efforts starting with the vision itself.

People quickly learn to spend their time on marketing and product creation, rather than repetitive tasks. Apart from empowering companies and individuals, there should be a particular focus on identifying labor intensive businesses that have the potential to make a significant and positive impact on employment creation as well as those businesses that have a product or service offering for export markets with the final objective of booming local economies.

A Guide on Successful Product Creation and Internet Marketing

Product creation in Internet marketing is getting stiffer and stiffer nowadays owing to tough competition between Internet-based businesses. Putting up a new product requires plenty of brainpower and finances along with an ability to take risk. With that, even if you have the product well-set already, you have to position it strategically in the Internet landscape for others to notice. You should get the interest of Web users and turn them to actual customers. Aside from the usual physical products, many different products that thrive well on Internet marketing include E-books, membership sites, and video lectures.

The long and difficult process of product creation begins with ideas. They are easy to get – compared to the effort that comes with analyzing the market for that idea. Before the idea turns to a product, businesses often spend money, even amounting to millions of dollars, to ensure the success of the new product that emerges from an idea. Businesses undertake many types of market research and surveys before releasing their products to the public. Now, you may think that because your business is small, you can’t afford research or you don’t have to do research; you can and you should. The Internet allows you to disseminate materials needed for your market study to many people at once without your having to spend a cent.

It is a common maxim in business: Look at your destination first before mapping out your journey. So what are the goals you intend to accomplish with your product creation ventures? The everyday travails of your business may make you forget the end in sight. On the other hand, prepare to entertain new developments that come to your mind in your product creation. Your conception of a product may have started this way, but a few tweaks here and there along with some market research results and it ends up another way. Take it as the result of a creative process, not as a failure to reach your goal. After all, your product creation activities are intertwined with a long-term goal that you should strive to sustain at your utmost: profit generation. So if your less profitable initial idea evolves to a more profitable product, be thankful!

With your product made up already, start doing some aggressive Internet marketing. A product purchase typically comes after more than five times a customer is exposed to an informative call-to-buy message. Thus it is important to get the contact details, like the e-mail address, of potential customers who are on the brink of a sale. Use the results of your market research to determine the demographics to which you should concentrate your marketing efforts.

With consistent product creation, you can make an inventory of your products that you can market in due time. Just keep making products – the moment you succeed in making and marketing a product, customers are surely wanting more from you, so give it to them. Keep them on your side through constant product creation.