Business groups have welcomed the European Commission's approval of extensions and changes to the Business Expansion Scheme (BES) and the Seed Capital Scheme (SCS), but have expressed concerns about some of the conditions imposed.
The Tánaiste and Minister for Finance, Brian Cowen, said he would bring forward shortly the necessary changes in legislation.
The changes will provide essentially that from January 2007, medium-sized enterprises may qualify if they are located in assisted areas (currently includes all counties except Dublin, Meath, Kildare and Wicklow, as defined under EU State aid guidelines).
In non-assisted areas (currently counties Dublin, Meath, Kildare and Wicklow) they may qualify where they are in seed or start-up phase only.
In order to comply with EU rules on State aids, a company that raises finance under the BES and/or the SCS will have the level of other State aids affected (with the exception of grants for research and development).
Irish Software Association chairman Pat Brazel said that if the Commission's conditions meant companies could not avail fully of other state supports, such as employment and training assistance, this would restrict their development.
The Institute of Chartered Accountants expressed concern that the conditions represented 'further evidence of a hardening of the Commission's attitude to such schemes'. It said they created another hurdle for Irish businesses, and could eliminate the benefits of BES for some companies.
