The Community Economic and Development Fund (CEDIF) was launched in Nova Scotia in 1999 as a way for Nova Scotian’s to invest in local enterprises. Under the CEDIF program Nova Scotia residents can invest in local enterprises and may receive a tax credit for their investment.
Under the program, Nova Scotia ventures can raise capital through the selling of shares to Nova Scotia residents. The funds raised are placed under the control of a local group of officers and directors. This group is chosen by founders and partners of the CEDIF or by the CEDIF investors at an annual general meeting.
To start a CEDIF the group looking to start the enterprise must prepare and file an Offering Document with the Nova Scotia Securities Commission and apply for an Equity Tax Credit from the Department of Finance. Once the offering document has received a letter of non-objection and a tax credit certificate, they may begin selling shares and advertising to the public in Nova Scotia.
Anyone investing in a CEDIF may receive a 35 per cent non-refundable provincial tax credit for their investment. To qualify the investment in the CEDIF must be held for at least five years. The maximum investment amount eligible for the tax credit is $50,000 and no one investor can hold more than 20 per cent ownership in a single CEDIF.
To date more than 74 companies have been created through the CEDIF process and more than $96 million has been invested by Nova Scotians.
Investors considering an investment in a CEDIF should read the offering document prior to committing funds. The offering document contains the relevant background information about the CEDIF and its officers and directors and the risks about investing in a start-up or small business.
The Nova Scotia Securities Commission does not assess the merits of the CEDIF or its offering document.