Direct Equity Tax Credit

Raising private capital can be one of the biggest hurdles for small businesses trying to launch, modernize, or scale in Newfoundland and Labrador. The Direct Equity Tax Credit is designed to make that conversation with potential investors easier by offering a meaningful provincial tax incentive to individuals and corporations that invest directly in eligible local businesses. By reducing the investor’s tax burden, the program helps businesses attract equity financing that supports job creation and long-term growth.

Administered by the Government of Newfoundland and Labrador through the Department of Finance, the program provides a non-repayable provincial income tax credit tied to share investments in qualifying small business activities. The value of the credit varies by region, with higher support—up to roughly one-third of the investment—available for projects located outside the North East Avalon, and a lower but still significant credit available within the North East Avalon. This regional approach is intended to encourage economic diversification across the province while still supporting growth in more urban areas.

While the tax credit is claimed by the investor, the real impact is felt by businesses that are able to secure capital for start-up costs, expansion plans, or modernization projects. For Newfoundland and Labrador entrepreneurs considering equity investment as part of their financing strategy, reviewing the full program details can help determine how the Direct Equity Tax Credit could strengthen your funding approach.