Companies looking to raise finance through various venture capital schemes need to meet a number of conditions to qualify, and HMRC published guidance on 30 March 2017 about the permanent establishment criteria.
To be a qualifying company for the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) or Social Investment Tax Relief (SITR), the business must have a fixed place of business in the UK through which the business is wholly or partly carried on. The guidance gives the some examples of how a business might be permanently established in the UK: by having an office or factory in the UK; a place of management in the UK or a workshop in the UK. It is also possible to be permanently established in the UK if the business has an agent based in the UK who is able to enter contracts on behalf of the company (and this must amount to a substantial element of the company’s business).
The guidance also sets out the rules for group companies including non-UK resident parent companies.