Who is eligible for EMI options?
By SuLe · Updated 15 May 2026
EMI has two eligibility gates: the company must qualify and each recipient must qualify. The company needs gross assets of £30m or less, fewer than 250 full-time-equivalent employees, independence and a qualifying trade. The recipient must be an employee working 25 hours a week (or 75% of their working time) and hold no more than a 30% interest.
Key facts
- The company must have gross assets of £30m or less and fewer than 250 full-time-equivalent employees.
- It must be independent — not a 51%+ subsidiary or otherwise controlled — and carry on a qualifying trade.
- The recipient must be an employee working at least 25 hours a week, or 75% of their working time, for the company or group.
- Anyone holding more than a 30% "material interest" in the company cannot hold EMI options.
- Contractors, advisors and non-executive directors are not employees and cannot receive EMI at all.
Who can receive EMI options?
Only employees. The person must hold an employment (not a consultancy or a board-only appointment) with the company or a qualifying subsidiary, and meet the working-time test.
That immediately rules out contractors, advisors and non-executive directors, however central they are to the business — they need unapproved options or growth shares instead. [More: Can contractors or advisors receive share options?]
It also rules out most majority founders, because of the 30% material-interest limit. EMI is squarely aimed at the employed team below founder level.
Does my company qualify for EMI?
Four company tests, all applied at grant. Gross assets of £30m or less; fewer than 250 full-time-equivalent employees across the group; independence from any controlling company; and a qualifying trade.
Independence means the company must not be a 51%-or-more subsidiary of another company, nor otherwise under another company's control. A UK subsidiary of a foreign parent will usually fail this.
Outgrow the size limits — through headcount or a balance sheet over £30m — and EMI closes to new grants, at which point a CSOP often becomes the route. [More: What is a CSOP and when does it beat EMI?]
What is the working-time requirement?
The employee must commit meaningful time to the business. The test is at least 25 hours a week, or, if they work fewer hours, at least 75% of their total working time, for the company or its group.
The 75% limb is what lets genuine part-timers qualify. Someone working three days a week for you and doing little else can meet it, even though they fall short of 25 hours.
The requirement is ongoing, not just a grant-day snapshot. If an employee's hours drop below the threshold later — going part-time to work elsewhere, say — that is a disqualifying event, and the option must be exercised within 90 days to keep full EMI treatment.
What is the 30% material interest limit?
EMI is for employees, not owners, so anyone with real control is excluded. An employee with a "material interest" — more than 30% of the company's ordinary share capital — cannot hold EMI options.
The 30% test looks at shares held by the individual and certain associates, so you cannot sidestep it by parking shares with a spouse. It is the main reason most founders cannot grant themselves EMI.
For an ordinary hire this is almost never an issue; for a founder-employee sitting near the line, it needs checking before grant.
Which trades are excluded from EMI?
The company must carry on a qualifying trade, and the exclusions broadly mirror the SEIS/EIS excluded activities. Banking and finance, property development, legal and accountancy services, farming, hotels and energy generation are among the trades that do not qualify.
If more than a small part of your activity is an excluded trade, the whole company can fail the test. Most technology, product and consumer startups qualify comfortably; asset-backed and professional-services models are the ones to check.
Because the list tracks the venture-capital-scheme exclusions, the same analysis you did for SEIS or EIS usually carries over. [More: Which trades are excluded from SEIS and EIS?]
| Test | EMI requirement | Common failure |
|---|---|---|
| Gross assets | £30m or less | Large balance sheet post-Series B |
| Employees | Fewer than 250 FTE | Rapid scaling |
| Independence | Not 51%+ subsidiary/controlled | UK sub of a foreign parent |
| Trade | Qualifying trade | Property, finance, professional services |
| Employee status | Genuine employee | Contractors, advisors, NEDs |
| Working time | 25 hrs/week or 75% of time | Going part-time elsewhere |
| Material interest | 30% or less | Majority founders |
Worked example
Sara runs Verda, a carbon-accounting startup with gross assets of £900,000, 22 employees and a clearly qualifying software trade. She wants to grant EMI options to three people.
Her lead engineer works full time and holds no shares — eligible. A part-time data scientist works three days a week and does nothing else professionally, comfortably meeting the 75%-of-working-time limb — eligible. But her co-founder, who owns 45% and wants options too, is blocked by the 30% material-interest limit.
Sara grants EMI to the engineer and data scientist, and looks at growth shares for the co-founder instead. Verda itself sails through the company conditions, so the only constraint is at the individual level.
Where founders go wrong
Trying to grant EMI to non-employees.
Contractors, advisors and NEDs are ineligible however important they are — they need a different instrument.Overlooking the 30% limit for founder-employees.
A founder near the material-interest line can be silently disqualified; check the shareholding before granting.Assuming part-timers cannot qualify.
The 75%-of-working-time limb lets genuine part-timers in — the 25-hour figure is not the only route.Missing a company condition after a growth spurt.
Passing 250 employees or £30m of assets closes EMI to new grants, often unnoticed until the next batch.
Related questions
Can a director get EMI options?
Yes, if the director is also an employee, meets the 25-hour or 75%-of-working-time test, and does not hold more than a 30% interest in the company. Non-executive directors who are not employees cannot get EMI, and most majority founders are blocked by the 30% material-interest limit. [More: Can contractors or advisors receive share options?]
Do part-time employees qualify for EMI?
They can. The test is at least 25 hours a week, or if they work fewer than that, at least 75% of their total working time for the company or group. A genuinely part-time employee whose other commitments are small can still meet the 75% limb. [More: What is an EMI share option scheme?]
Can founders hold EMI options?
Rarely. EMI excludes anyone with a material interest of more than 30% of the shares, which catches most founders. A founder holding under 30% who is also a working employee could qualify, but the typical majority founder cannot. [More: What are growth shares?]
What disqualifies a company from EMI?
Gross assets over £30m, 250 or more full-time-equivalent employees, being a 51%-or-more subsidiary or otherwise controlled by another company, or carrying on a non-qualifying trade. Cross any of these and the company can no longer grant EMI options. [More: What is a CSOP and when does it beat EMI?]
Do the company conditions have to be met only at grant?
The main company and employee conditions are tested at grant, but some — like the working-time requirement and continued qualifying trade — must keep being met. Failing them later is a disqualifying event, giving the holder 90 days to exercise on the favourable terms. [More: What happens to share options when an employee leaves?]
EMI eligibility is a two-sided test, and a single missed condition — a foreign parent, a part-time move, a founder over 30% — can quietly strip the tax relief from a grant. A SuLe solicitor can check both the company and each recipient before you commit. Book a free call about your option scheme and confirm who actually qualifies.
Keep reading: What is an EMI share option scheme? · Can contractors or advisors receive share options? · What are growth shares? · What is a CSOP and when does it beat EMI? · How do I set up an EMI scheme? · Which trades are excluded from SEIS and EIS?
Primary sources: GOV.UK — Enterprise Management Incentives (EMIs)
