Enterprise Investment Programme (EIP)...
Introduction
The Enterprise Investment Programme (EIP) was announced by The Department of Trade & Industry. The incentive scheme is a tax free incentive payable over a two year period for larger projects and 3 year period for smaller ones.
Aim
It is aimed at projects of up to R200m in investment and applicable to projects engaged in Manufacturing and Tourism activities. To qualify application must be made before undertaking the investment. New projects as well as those expanding their qualifying assets by at least 50% (35% in first year) may qualify.
How much can I get?
Manufacturing projects
The incentive amounts to up to 30% of qualifying investments in land and buildings, plant and vehicles. To be eligible for this grant the project must demonstrate commitment, financial viability, need for the grant and score a certain minimum of points are scored on the basis of an Development Impact Criteria (DIC) matrix which evaluates:
1. Incentive per employment opportunity ratio.
2. Broad Based Black Economic Empowerment compliance.
3. Location in areas which have higher than national unemployment levels and are provincially prioritised for employment creation
For a total of up to 10 points on this matrix.
Projects of under R5m in qualifying investment level receive 10% per annum of their qualifying investment by way of a grant for 2 years and a further 10% grant if their incentive to employment cost ratio does not exceed R60000.
Projects of R5-200m in qualifying investment level get a grant of up to 15% for 2 years if, in addition to the above criteria plus certain financial criteria, they achieve 4 points on the Economic Benefit Matrix (EBM), which evaluates:
1. Being a project within a priority sector (certain Standard Industrial Classifications have been so designated).
2. Expansion or upgrading of a project in the clothing and textile sector.
3. Incentive per employment opportunity ratio.
4. Broad Based Black Economic Empowerment compliance.
5. Location in areas which have higher than national unemployment levels and are provincially prioritised for employment creation.
Grants, which are tax exempt, are payable bi-annually over 2 or 3 years, as applicable.
Tourism projects
Tourism projects consist of accommodation services and directly related hospitality services (i.e. restaurants, bars, spa’s, wellness centres, sports facilities etc.) transport services, agencies and tour operators and tourism cultural services.
To be eligible for this grant, the project must create a certain minimum employment opportunities which varies on project size expressed in terms of qualifying investment levels, the project must demonstrate commitment, financial viability, need for the grant and have a Level 4 Broad Based Black Economic Empowerment compliance level (i.e 65% on the Generic or Qualifying Small Enterprises Scorecard).
The incentive, for projects of under R5m in qualifying investment level, is a 10% per annum grant for 3 years. For projects of R5-200m in qualifying investment level, in addition to the criteria applicable to the smaller projects, the project must demonstrate grant necessity and other financial criteria after which it may be granted an incentive of up to 15% per annum for a 2 year period.