Unlocking capital: Strategies for Ireland's entrepreneurial growth

Explore key strategies to mobilise private capital and support Ireland's entrepreneurial ecosystem for sustainable growth.

In brief

• Ireland's entrepreneurial ecosystem faces capital access challenges despite available resources.
• Implementing targeted tax incentives and enhancing existing schemes can stimulate private investment.
• Six strategic options, including EIIS enhancements and corporate incentives, can unlock vital funding for scaling businesses.

Capital thinking for a smarter entrepreneurial ecosystem

Ireland’s entrepreneurial ecosystem has real potential, but access to capital remains a challenge. Despite our growing wealth, early-stage and scaling businesses struggle to raise the funds they need to grow. It’s a gap that needs attention and action.

Luckily, for now, the resources exist both at a public and private level to fund these investments but unlocking the capital in a more thoughtful and targeted way is critical. Household bank deposits reached €162 billion in March of 2025 and pension fund assets stood at €134 billion in June. Meanwhile, the corporate sector has significant reserves of underused capital. The task at hand is to understand how to access and best deploy these sources of capital to fund enterprise and innovation.

While funding gaps remain, it is unrealistic to expect the Government to bridge them entirely through direct spending. Instead, Government’s role should be to encourage private capital flows that can stimulate private investment by streamlining existing schemes and offering targeted tax incentives to individuals and businesses.

Six options to mobilise and sustain the deployment of capital.

The following suggestions have the potential to unlock private capital for companies looking to scale internationally. If we can create a framework for local investment, the opportunity exists to keep businesses here for the long term and discourage entrepreneurs from exiting their businesses at the first opportunity.

1. Extend and enhance EIIS

The Employment Investment Incentive Scheme (EIIS) has had some meaningful success, but it could be enhanced. For example, whilst EIIS can currently only shelter income tax, why not extend it to reducing Capital Gains Tax (CGT). This would mean that successful investors could reinvest part of their sale proceeds and get a tax deduction for that amount. Matching a once off gain with targeted reinvestment can unlock fresh capital.

Focusing on increasing the amount of EIIS investment that a company can raise, along with incentivising individuals to keep their funds invested for longer (by taxing dividends at a lower rate), is critically important. If companies can retain EIIS investment for extended periods, they gain greater certainty regarding their funding requirements, allowing them to make longer-term investments. Additionally, by offering tax-efficient dividends, the commercial pressure to repay the EIIS investment early is alleviated.

2. Bring corporates into the fold

Tax efficient investments have typically been targeted at individuals rather than corporates. Incentives for corporates to invest surplus cash (or cash invested in passive assets) should also be explored. Unlocking passive assets tied up in a portfolio of stocks and shares and having those resources redeployed to clearly targeted sectors in critical areas can be powerful.

One historic scheme was 486B TCA 97 which provided tax relief for corporate equity investments in certain renewable energy generation projects and ran from March 1999 until December 2014. The relief was in the form of a deduction from a company’s profits for its direct investment in new ordinary shares in a qualifying renewable energy company.

The introduction of a new, similar scheme to incentivise corporate equity investments in qualifying companies or activities could be quite compelling. It would enable companies to unlock some of the surplus capital sitting in passive deposit accounts or share portfolios, which is a smarter and more appealing way to use the money. The potential tax savings would reduce the gap between after-tax returns and risks when compared to a passive portfolio.

3. Unlocking pension scheme assets

Pension schemes are always on the lookout for promising investment opportunities. Imagine the benefits of effectively targeting these schemes to encourage investment in Irish businesses. Currently where a pension scheme exceeds the standard fund threshold the excess is taxable at rates of up to 71%. If the return on targeted qualifying investments is excluded from the “excess” then that creates an incentive to invest and stay invested in those qualifying investments.

4. Reintroduce CGT roll over relief

Roll-over relief allows investors who acquire qualifying assets to defer any capital gains tax (CGT) until the replacement asset is sold. This provision should be reintroduced. For instance, it seems unreasonable for a business planning to expand to incur a capital gains tax (CGT) charge on the sale of a property when they intend to reinvest the entire amount in a larger, more suitable premises. Reintroduction of relief will assist businesses to reinvest with confidence and not have to suffer that CGT cost until the replacement asset is sold. Such a relief will also support businesses looking to relocate their businesses which might otherwise be located in an area which might benefit from residential development or critical infrastructure projects.

Consideration should be given to a form of roll over relief, as above, where the proceeds of sale are reinvested in a category of qualifying assets (such as AI, advanced manufacturing, critical infrastructure, renewable energy etc).

5. Research and Development

After years of progress, Ireland is now falling behind in investing in research and innovation. The Draghi Report indicates that Ireland’s competitiveness is trailing the US and other global players, now sitting below the EU average. There is a clear need for a new, enhanced plan.

The costs and timelines associated with pure research are substantial. We must explore ways to share this burden. Let's remove limits on R&D tax credits for research conducted by universities, facilitate R&D tax credits for co-development and joint ventures, and reward those who engage in R&D.Increasing funding to our universities can create opportunities for our talent and the sector as a whole.

In addition to financial rewards, we firmly believe that individuals and companies would take pride in investing in these Irish opportunities. Irish entrepreneurs are altruistic, but we need to simplify the process for them.

6. Let’s keep invested

Many Irish entrepreneurs have exited prematurely. It would be far more beneficial for the economy if these businesses remained anchored in Ireland. Access to capital and derisking personal position are often cited as rationales for early exit. Given that, in addition to incentivising capital, there should also be opportunities for entrepreneurs to derisk their personal financial position, in a tax efficient manner, whilst remaining fully engaged with the business. For example, could some of the tax incentives referred to above apply to the purchase of a founders shares as well as investing in the business? Taking something “off the table” gives the security and peace of mind to allow the entrepreneur to double down and drive growth.

Fortune favours the brave (and fast)

These are just some of the actions which could be taken to make much needed additional capital available to start-up and scaling businesses. But there is no time to lose. The cost of doing business is more challenging and complex than ever before, and tariffs and trade disruptions will make the environment even trickier for innovative enterprises.