Direct Equity Tax Credit
- Open continuously
Overview
Tax credit of 20% (North East Avalon region) or 35% (other regions) for individuals and corporations who invest as shareholders in Newfoundland and Labrador small businesses for start-up, modernization and growth.
At a glance
Funding available
- Increase performance through digital transformation
- Reduce environmental footprint
- Maximum amount : 3,000,000 $
- Up to 35% of project cost
- Open continuously
Eligible candidates
- Agriculture, forestry, fishing and hunting
- Manufacturing
- Information and cultural industries
- Newfoundland and Labrador
- For-profit business
- All revenue ranges
- 50 employees maximum
- Rural or Northern Residents
- Startups
Next Steps
Activities funded
The Direct Equity Tax Credit program is aimed at encouraging investment in small businesses engaged in emerging and growing sectors within Newfoundland and Labrador. The initiatives must be focused on areas that contribute to economic development and technological advancement in the province.
- Technology-related projects.
- Research and development initiatives.
- Aquaculture projects aimed at industry growth.
- Forestry and agrifoods development.
- Manufacturing and processing advancements.
- Projects targeting import replacement and export enhancement.
- Tourism-related business initiatives.
- Development within the cultural industries sector.
Eligibility
Who is eligible?
The Newfoundland and Labrador Direct Equity Tax Credit targets small businesses in specific growth areas of the economy. Eligible companies engage in activities such as technology, research and development, aquaculture, and others.
- Technology
- Research and Development
- Aquaculture
- Forestry and Agrifoods
- Manufacturing and Processing
- Export / Import Replacement Businesses
- Tourism
- Cultural Industries
Who is not eligible
This grant program excludes certain companies and industries based on their primary business activities or intended use of the funds. These exclusions are designed to ensure alignment with the strategic economic objectives outlined by the program.
- Companies primarily engaged in wholesale or retail activities.
- Businesses offering food and beverage services.
- Entities providing personal and business services, professional practices, and trades.
- Companies involved in real estate marketing and development.
- Organizations in oil and gas development and production.
- Mineral resource exploration companies.
- Firms in financial services.
- Businesses focused on fish harvesting and primary fish processing, except processing of underutilised species as designated by the Minister.
- Any other business activity not aligned with the program's spirit and intent, as determined by the Minister.
Eligible expenses
The Direct Equity Tax Credit program in Newfoundland and Labrador encourages investment in small business initiatives within growing economic sectors. The eligible projects focus on activities that contribute to economic development and diversification in the region.
- Engagement in technology-related businesses.
- Pursuing research and development initiatives.
- Investments in aquaculture enterprises.
- Development activities in forestry and agrifoods.
- Manufacturing and processing operations.
- Export businesses and import replacement activities.
- Tourism-related projects.
- Cultural industry initiatives.
Eligible geographic areas
This grant is aligned to boost economic activities across Newfoundland and Labrador, specifically targeting regions outside of the North East Avalon. Companies in these areas benefit from a higher tax credit rate to stimulate growth in emerging industries.
- Bauline
- Conception Bay South
- Flatrock
- Logy Bay-Middle Cove-Outer Cove
- Paradise
- Petty Harbour
- Portugal Cove-St Philip’s
- Pouch Cove
- Torbay
- Mount Pearl
- St. John’s
Additional information
Here are additional relevant details for this grant:
- The tax credit is available to individual investors for shares purchased during the calendar year or within 60 days after year-end for carry-back purposes.
- Tax credit may be carried forward for up to seven years or carried back for three years, with specific restrictions applying to individuals and corporate investors based on fiscal years.
- Eligible businesses must not redeem eligible shares within five years after issuance, else a penalty is levied.
- Certification is valid for three months with an option for extension by the Minister.
- Investors must submit tax credit receipts with their tax returns to claim the credit.
- An independent auditor's statement is required for businesses to confirm compliance and good standing.
- Eligible businesses must provide detailed reports on shareholdings and director information for five years post issuance.