Under the ‘direct’ investment model, a small business registers as an eligible business corporation (EBC). EBCs can accept equity capital directly from investors without having to set up a venture capital corporation (VCC). This investment structure is ideal for an investor planning to be actively involved in the growth of the small business.

The program primarily focused on supporting the following sectors:

  • Manufacturing and processing
  • Research and development of proprietary technology in B.C.
  • Development of clean technology
  • Development of interactive digital media
  • Destination tourism

Tax Credits

Individual

Individual investors are entitled to a 30% refundable tax credit, up to an annual maximum tax credit of $120,000. Individual investors who invest in the first 60 days of a calendar year can elect to apply their tax credits to the previous calendar year’s tax return.

Corporation

Corporate investors are entitled to a 30% non-refundable tax credit, however, there is no annual tax credit limit. Corporate investors can only claim the tax credits in the year of investment. Both individual and corporate investors can carry unused portions of tax credits forward for four years.

Substantially Engaged in a Qualifying Activity

To be substantially engaged, more than 50 percent of the assets and expenses of the business are used in one or more of the prescribed qualifying activities.

Formula: (Qualifying Activity Assets + Qualifying Activity Expenses)/(Total Assets +Total Expenses) > 0.5

Website: BC Eligible Business Corporation Guidelines 

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