Direct Equity Tax Credit ### 📋 Eligible Entities - Individuals who make qualifying investments in eligible small businesses - Corporations who make qualifying investments in eligible small businesses - Target investees: Newfoundland and Labrador small businesses in start-up, modernization, or growth phases - Investee businesses must meet small business definition under NL criteria ### 💰 Funding Details - Tax Credit Rate (Non-Repayable): - 35% for investments in regions outside North East Avalon - 20% for investments in the North East Avalon region - Structure: Credit applies to qualifying equity investments made by individual or corporate investors - Repayability: Not applicable—this is a non-repayable tax credit - Timing: Credit claimed on investor's tax return following the investment year ### 🛠️ Approved Expenses - Equity investments in eligible NL small businesses for: - Start-up activities and initial operations - Modernization of existing business operations and infrastructure - Growth initiatives and business expansion - Funds support capital deployment into small business ventures ### ⚠️ Conditions & Milestones - Investment must be made in a Newfoundland and Labrador small business - Business must be engaged in eligible activities (start-up, modernization, or growth) - Regional designation affects credit rate (20% vs. 35%) - Investor claims credit on annual tax return for the year investment is made - Investment must comply with NL securities and business investment regulations - Investee business must meet ongoing eligibility requirements throughout the credit claim period - Credit is subject to provincial tax legislation and CRA compliance rules