Direct Equity Tax Credit

Amount

Varies

Deadline

Rolling

Odds

Rules-based, not competitive

Effort

1–2 hours

Can you get this?

✓Must be small business in Newfoundland and Labrador

✓Business must conduct eligible small business activities

✓Investors must be arm's length from the business

✓35% credit for activities outside North East Avalon

✓20% credit for activities within North East Avalon

Your real odds

This is a tax credit program, so approval depends on meeting eligibility rules, not beating other applicants.

If your business qualifies as an eligible small business under the program guidelines, investors can access the credit, and the main hurdle is ensuring your business activity and structure meet the provincial criteria outlined in the DETC Guidelines.

What it takes

Review the Direct Equity Tax Credit Guidelines on the NL Finance website to confirm your business activity qualifies1–2 hours

Apply to have your business certified as eligible through the NL Department of Financedays to weeks depending on review

Raise equity from arm's-length investors and issue official tax credit receipts for their T1 or corporate tax returnongoing as investment closes

Worth knowing

The 35% credit rate for businesses outside the North East Avalon is meaningfully higher than the 20% rate in the St. John's metro area, so if your business can operate regionally, that stronger credit makes your equity raise more attractive to investors.

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