Appendix A: (Continued)
3. International Precedents for National Tax Credits
Well-designed national tax incentives have played a catalytic role in mobilizing early- stage investment, accelerating firm growth, and improving fiscal outcomes across several leading innovation economies. The following examples illustrate the power of targeted, investor-side policy instruments to unlock private capital at scale.
United Kingdom (EIS/SEIS):
Since 1993, the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) have mobilized over £33 billion in private investment toward early-stage companies by offering generous tax relief to retail and angel investors. In 2022 alone, the program returned £1.14 in tax revenue for every £1 in relief provided. According to the British Business Bank (2022), companies backed under EIS demonstrate higher survival rates and greater success in follow-on fundraising than comparable non- EIS firms. The OECD (2023) identifies EIS/SEIS as a global best practice in addressing early-stage capital gaps while reinforcing national innovation capacity.
United States (QSBS):
The Qualified Small Business Stock (QSBS) exemption allows investors to exclude up to 100% of capital gains on qualified startup equity held for more than five years—up to the greater of US$10 million or 10× the original investment. Between 2010 and 2020, early-stage deal volume increased by 23%, a trend partly attributed to the availability of QSBS and complementary state-level angel tax credits. The policy is especially effective in activating family offices and high-net-worth individuals, and has enjoyed bipartisan support for nearly three decades—making it one of the most stable and impactful early-stage investment incentives globally.
50
Powered by FlippingBook