The UK's three tax-based venture capital schemes have each received formal state aid approval from the European Commission.
The EIS, VCT, and CVS were notified to the European Commission as state aids in 2007.
The Government was then legally obliged to demonstrate the rules governing the schemes comply with the appropriate guidelines and treaties.
This approval has now been granted on the basis of four changes, due to be introduced in the Finance Bill 2010, and the Government believes it is now able to provide a level of certainty over the future of the schemes.
The most significant is a relaxation of the rules relating to the location of small companies' qualifying activity which will allow companies to receive investment under the schemes while enjoying greater opportunities to expand internationally.
Exchequer Secretary, Angela Eagle MP, says: "This is excellent news for the venture capital industry, particularly at this challenging time.
"State aid approval of the three venture capital schemes allows the Government to provide certainty over the future of the schemes. The Government is confident that they will continue to encourage substantial investment into small companies which is vital to our economic recovery."
