Ireland company registration

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Ireland company registration

DOING BUSINESS IN IRELAND


Since 2003, Healy Consultants Group PLC has been efficiently and effectively assisting our Clients with i) Irish business registration ii) business licensing iii) Irish business banking solutions iv) visa options and staff recruitment strategies and v) tax planning solutions.

SummaryTax resident LLCTax resident PLCCompany limited by guaranteeLLPRepresentative officeBranch company
Best use of company?Global trading companyStock exchange listingNonprofit businessProfessional servicesMarketing and researchBank branches
Legally tax exempt if properly structured?NoNoNoNoNoNo
Effective corporation tax rate on net profits of €500,000?4.5%4.5%4.5%0%0%4.5%
Corporate bank account location?Barclays IrelandUlster Bank IrelandBank of IrelandKBC Bank IrelandSCB BankUlster Bank Ireland
Client must travel to Europe?NoNoNoNoNoNo
Can secure trade finance?YesYesYesYesNoYes
Limited liability entity?YesYesYesYesNoNo
VAT payable on sales to local customers23%23%23%23%0%23%
Withholding tax on payments to shareholders?0%0%0%0%0%0%
Average total engagement costs?6,2559,1056,2558,1057,2107,370
Average total engagement period?9 weeks10 weeks11 weeks9 weeks9 weeks9 weeks

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Accounting and tax considerationsTax resident LLCTax resident PLCCompany limited by guaranteeLLPRepresentative officeBranch company
Statutory corporation tax payable?12.50%12.50%12.50%0%0%12.50%
Must file an annual Ireland tax return?YesYesYesYesYesYes
Must file annual financial statements?YesYesYesYesYesYes
Investment income is legally tax exempt in Ireland?YesYesYesYesYesYes
Access to double taxation treaties?YesNoYesYesNoNo
This entity enjoys Government incentives?YesYesYesYesNoYes
VAT reporting to the Government every two months?YesYesYesYesYesYes
Legally tax exempt entity?NoNoNoNoNoNo
Dividends received are legally tax exempt?YesYesYesYesYesYes
Company registrationTax resident LLCTax resident PLCCompany limited by guaranteeLLPRepresentative officeBranch company
Resident director required?YesYesYesYesNoNo
Minimum number of shareholders\partners?1712Parent companyParent company
Minimum number of directors/managers?121211
Minimum paid up share capital?€1€25,000€1€1NoneNone
Shelf companies available?YesYesNoNoNoNo
Time to incorporate a new entity?1 week1 week2 weeks1 week1 week1 week
Can easily convert to a local PLC company?YesYesNoNoNoNo
Can have preference shareholders?YesYesNoNoNoNo
Business considerationsTax resident LLCTax resident PLCCompany limited by guaranteeLLPRepresentative officeBranch company
Can invoice local customers?YesYesYesYesNoYes
Can hire local staff?YesYesYesYesYesYes
Can rent local office space?YesYesYesYesYesYes
Secures a residence visa for business owner?YesYesNoNoYesNo
Good entity for trademark registration?YesYesYesNoNoNo
Other useful informationTax resident LLCTax resident PLCCompany limited by guaranteeLLPRepresentative officeBranch company

Ireland has signed free trade agreements?Yes, see this page
This country is a member of WIPO and TRIPS?Yes
The country is a member of the ICSID?Yes
Average customs duties suffered?10%
Government foreign investment approval is required?No
Average monthly office rental? (US$ per sq m)US$37
Minimum statutory annual salary?€1,850
Average monthly US$ salary for local employees?€2,300
Ireland € deposit interest rate? (1 year average)0.45%
Overseas remittance currency controls?None
Public register of shareholders and directors?Yes
Banking considerations
Multi-currency bank accounts available?Yes
Corporate visa debit cards available?Yes
Quality of e-banking platform?Excellent
Crowd funding available in this country?Yes

  • Advantages of Ireland business set up

    Ireland business registration advantage
    1. Ireland resident companies of all sizes enjoy the following tax incentives:
      • The Ireland corporation tax rate is 12.5%, the second lowest in the EEA after Bulgaria. It is possible to further reduce the annual tax bill by up to 25% by deducting R&D costs;
      • For the 1st year of business, trading profits can be reduced by expenditure incurred in the three years prior to the commencement of trade. Furthermore, for the first 3 years, annual income up to €320,000 is legally tax exempt;
      • There is no withholding tax for Irish companies on outbound payments to 72 double taxation signatory countries and the EU including dividends, interest and royalties. Also, there is a capital gains tax exemption on disposal of international subsidiaries;
      • An Irish LLC is exempt from VAT, if at least 75% of sales turnover arises from the export of goods;
      • Irish SMEs are not subject to i) annual audit (if the group has annual turnover less than €8 million and hires less than 50 employees) and ii) transfer pricing provisions;
      • The Irish Tax Authorities welcome email and phone communication from business owners. Tax officers are helpful providing timely written advance tax rulings and clarifications regarding tax laws.
    2. Irish companies may also receive following cash benefits from the Government:
      • An Irish LLC receives a cash grants of €10,000 for each staff member hired from the long term unemployed pool. Free re-training and re-skilling courses for these employees;
      • An Irish LLC receives an annual cash grant of €10,748 for each employee with a disability;
      • The remuneration of part-time employees is paid by the Irish Government, not the employer.
    3. Large MNCs doing business in Ireland through a subsidiary enjoy countless benefits including:
      • An effective corporation tax rate of 0%, usually after Group relief. Also, if the Irish company is properly structured, investment income including i) subsidiary dividends ii) interest, royalty and patent income and iii) foreign branch profits is legally tax exempt;
      • Access to i) low cost Government owned industrial parks with purpose-built factories and ii) low cost greenfield sites for industrial usage. Investors can custom-build factories without the need for local planning permission;
      • Excellent Group relief incentives including i) exemption from filing consolidated tax returns ii) inter-company transfer of trading losses, excess management expenses and excess capital allowances;
      • Stamp duty relief is available for transfers arising from corporate reorganisations and reconstructions;
      • Trading losses may be i) carried forward indefinitely against future trading profits ii) carried back for one year or iii) allocated within Group companies or iv) offset against capital gains tax liabilities;
      • Lastly, MNCs will also likely to benefit as there are no ‘Controlled Foreign Company (CFC)’ and ‘Thin Capitalization rules’ in Ireland. Furthermore, there is a limited transfer pricing legislation for large multi-national companies registered in Ireland.
    4. Foreign employees relocating to Irish companies enjoy low Irish income tax because:
      • 30% of remuneration in excess of €75,000 is exempt from income tax;
      • No benefit-in-kind income tax on i) employee family flights home ii) annual school fees iii) employee accommodation and subsistence costs and iv) employee stock options;
      • Employees can secure personal income tax relief on investments of up to €150,000 per annum in qualifying companies;
      • Employees of an Irish LLC enjoy an annual income tax reduction of €14,000, if they spend at least 40 days per annum working in an emerging market;
      • Business travellers can work in Ireland for two months without suffering income tax.
    5. Registering a company in Ireland provides a gateway to the EEA, the largest consumer market in the world. Specifically:
      • Ireland’s currency is the euro and will be the only English speaking member of the EU after the Brexit;
      • Sale of goods to customers within the EU are VAT free, but VAT is payable in the other member State;
      • An Irish LLC enjoys customs duty-free importation of goods from other EU countries;
      • Irish employees can easily move within the European Union to work and live.
    6. Multi-national companies starting a business in Ireland enjoy access to a large pool of quality skilled labour because:
      • Labour cost per hour is €29, one of the lowest in the EU. Employers are not legally required to provide their employees with pensions or other benefits such as health care;
      • Labour productivity per person in Irelands is the third highest in the EU;
      • Ireland has the youngest population in Europe, 55% under the age of 35. The young workforce has shown a particular aptitude for the efficient collection, interpretation and dissemination of research information;
      • Currently, 1 million people are in full time education in Ireland. In 2016, approximately 48% of 25 – 34 year olds are third level qualified;
      • Approximately 520,000 Irish residents speak a foreign language including Polish, French, Lithuanian, German, Russian, Spanish and Romanian;
    7. Ireland is a technology hub in Europe because:
      • An Irish LLC, which qualifies for the OECD compliant knowledge development box, only suffers corporation tax of 6.25%;
      • Ireland is a rich source of highly skilled talent in science, technology and engineering. As a result, the country is the largest exporter of software in the world;
      • Annual net profits enjoy an expense deduction for the cost of IP amortised over a 15 year period;
      • The Government offers a portfolio of Business & Technology Parks in strategic locations. Furthermore, the country has a vibrant business angel and venture capital environment;
      • The close link between multi-national companies and Irish universities encourages leading-edge research.
    8. Ireland does not impose corporate income tax and capital gains tax on hedge funds. As a result, Ireland is home to 40% of global hedge funds, which cumulatively account for €1.9 trillion in assets;
    9. By establishing a non-resident Irish LLC, our Client’s companies will be tax exempt in the country:
      • A company is regarded as non-resident if i) no business is done in Ireland ii) if the majority of shareholders and directors reside overseas iii) the entity neither has staff nor premises nor a corporate bank account in Ireland;
      • An international tax haven company is allowed to migrate the entity to Ireland. This is attractive to Clients who wish to abandon the use of tax haven companies, choosing instead to trade through reputable low tax entities like an Irish LLC. For example, a BVI entity can elect to be an Irish resident or non-resident Irish company, keeping the same name and international corporate bank account. The BVI LLC will thereafter no longer exist.
  • Disadvantages to Irish business set up

    1. An Ireland registered company suffers Irish VAT on imported goods and services, ranging from 0% to 23%. Goods imported into Ireland from outside the EU suffer customs duties;
    2. An Ireland registered company also suffers 25% corporation tax on annual net profits arising from passive income including i) local rents ii) local investment income or iii) income from oil, gas and mineral exploitations. A properly structured Irish LLC receiving international investment income enjoys the lower rate of 12.5%;
    3. A small tax resident Irish LLC suffers a surcharge of 20% on the undistributed investment and rental income. Professional services companies suffer a surcharge of 7.5% on undistributed trading income. Healy Consultants helps our Client legally eliminate this tax;
    4. Unfortunately, Irish parent and subsidiary companies must submit annual financial statements to independent statutory audit; regardless of sales income levels.
    5. Both resident director and company secretary are required for company incorporation:
      • Irish companies must either appoint one Director that is resident in Ireland or other EEA countries, or deposit a bond of €25,000 with the Irish Business Registrar;
      • Company secretary can either be one of the company’s director or a second body corporate. Single-director companies must appoint separate secretaries.
    6. The employer employee relationship is complicated by:
      • An 11% mandatory Government employer PRSI contribution;
      • The existence of powerful industrial unions;
      • The obligation to pay compensation to employees dismissed for reasons of redundancy;
      • Employees frequently force employers to attend Employment Appeals Tribunals re unfair dismissals;
      • In addition to income tax, employees of Irish companies suffer a punitive unpopular Universal Social Charge of 7% of gross remuneration.
      • The maximum average work week is 48 hours; however, in the collective agreements, the week is often reduced to 39 hours;
      • Also, included in the collective agreements will be the rates of overtime pay; for example, the current registered employment agreement for the construction industry provides for overtime rates of pay of time-and-a-half until midnight Monday to Friday and double time thereafter.
  • Best uses for an Irish company

    • Ireland is a popular choice for technologies multinational companies that wish expand their operations in Europe, because:
      • Ireland has the second lowest corporate rate in the region;
      • They can take advantage of the knowledge development box, and lower their corporate tax;
      • Access to a big pool of highly skilled and English-speaking employees;
      • Opportunities to collaborate with top universities and education centres in the country;
      • Lower cost of living, when compared to other major European cities;
      • Ireland is the key technology hub in Europe. Some examples of companies that set up European headquarters in Ireland include Apple, Facebook, Paypal and Microsoft.
  • Ireland tax reporting considerations

      VAT

    1. VAT registration is mandatory if annual sales forecast exceeds the following thresholds: i) €75,000 for supplying goods; and ii) €37,500 for supplying services;
    2. The standard VAT rate in Ireland is 23%. However, goods/services may be subject to reduced rates of 0%, 9% or 13.5%.
    3. Corporation tax

    4. Irish resident companies are required to pay corporation tax on their worldwide income and capital gains (standard rate – 12.5%). Where a company is resident in a treaty country, liability depends on whether the company is trading through an Irish permanent establishment (PE);
    5. An Irish LLC can reduce their tax bill by foreign tax paid on the same income. Excess foreign tax credits can be i) carried back to previous years or ii) claimed from the Governments in the form of cash or iii) offset against payroll taxes;
    6. An Irish resident company must file tax returns within 10 months of the accounting year end;
    7. If a company incurred tax liability of less than €200,000 in the previous year, it will be required to pay either i) preliminary tax of 100% (based on previous year’s liability) or ii) 90% of the current year liability by the 21st of the month prior to the year end. The balance of the tax is payable on the date the return is due to be filed;
    8. For companies with a tax liability exceeding €200,000, 2 instalments will be payable – the 1st in the 6th month and 2nd in the 11th month after accounting period. The instalment amounts will be either i) 50% of the preceding year’s liability or ii) 45% of the current year’s liability. The balance of the tax is payable on the date the return is due to be filed;
    9. There is a surcharge for late filing of income tax returns at the following rates:
      i) 5% (up to maximum of €12,695) / 10% (up to maximum of €63,485) of the tax liability for the year of assessment, depending on the number of months past the due date.
    10. Tax incentives

    11. A tax credit of 25% of the incremental R&D expenditure can be offset against a company’s corporation tax liability in the year in which it is incurred. Any remaining excess can be carried forward indefinitely for use against future corporation tax liabilities;
    12. Irish companies can claim tax credit equivalent to 25% of cost spent construction or refurbishment works carried out on an R&D building, where 35% of the building must be used for qualifying R&D activities within a four-year period;
    13. Corporate tax at 6.25% applies to certain profits from qualifying patents. Shareholders of company receiving dividends from patent income may also enjoy ‘tax-free status’;
    14. Capital expenditure incurred on acquisition or development of intangible assets are given allowances. The allowances may be granted at 7% per annum for the first 14 years and 2% for the 15th year;
    15. Foreign income dividends are tax exempted if i) the foreign subsidiary is tax resident in the EU or a Treaty Country with Ireland and ii) the dividends are paid out of trading profits of the foreign subsidiary which was subjected to at least 13% of foreign corporate or withholding tax.
    16. Other Tax Consideration

    17. Business registered in Ireland does not have capital duty or net wealth taxes;
    18. An Irish LLC suffers 33% capital gains tax on gain arising from disposal of capital assets;
    19. Stamp duty of 1% applies on transfer of common stock or marketable securities. For most other forms of property, stamp duty applies at 2%;
    20. To promote renewable energy sources, an Irish LLC suffers a carbon tax rate at €20 per tonne of CO2 emitted and is added to the cost of fuel.
  • Accounting considerations

    1. Group companies include i) entities in Ireland and in EU member states ii) entities in a treaty country and iii) a company quoted and traded on a recognized stock exchange. Group relief applies to subsidiaries at least 75% owned;
    2. Small companies are exempted from annual financial statements audit if they satisfy 2 out of 3 conditions:
      • Turnover of less than € 8,800,00;
      • A balance sheet total of less than € 4,400,000;
      • Number of employees is less than 50;
    3. This small company exemption is not applicable to:
      • Parent companies and their subsidiaries;
      • Banks and financial institutions and intermediaries;
      • Company that files a late annual return;
    4. Medium companies are exempted from annual financial statements audit if they satisfy 2 out of 3 conditions:
      • Turnover of less than € 20,000,00;
      • A balance sheet total of less than € 10,000,000;
      • Number of employees is less than 250.
  • Legal and compliance considerations

    1. Ireland is a member of the OECD. Furthermore, as a common law jurisdiction, Ireland has a legal system similar to that of UK and US;
    2. Intellectual property is often the most valuable asset to a company. It is hence important to note the intangible asset should be used for at least 10 years to prevent a clawback of the relief obtained. It comprises:
      • Patent, registered design, design right, copyright or invention;
      • Trademark, trade name or trade dress;
      • Brand or brand name;
      • Domain name, service mark or publishing title;
      • Know-how;
      • Authorisations to sell medicines, etc;
      • Customer lists, except where acquired as part of transfer of a business as a going concern;
      • Certain software;
      • Any licence in respect of, and any goodwill attributable to, the above;
      • Costs associated with applications for certain legal protection.
    3. Ireland is a signatory to the European Patent Convention (EPC) and the Patent Cooperation Treaty (PCT). Therefore, our Clients may choose to submit their applications for a patent at the Irish Patents Office; if approved, the patent will be recognized in all 36 member countries of the EPC. Similarly, a PCT application will also be deemed applicable in all EPC countries;
    4. R&D means:
      • Basic research (experimental or theoretical)
      • Work performed with aim of acquiring knowledge, which may or may not be used to develop a practical application in the future;
      • Experimentation performed in order to achieve scientific or technical advancement which may be used to produce/improve new/existing material or devices. To secure tax credit, it must be shown the project achieves advancement or resolves current uncertainty.
    5. Ireland has established a Labour Relations Commission (LRC) and Labour Court to mediate in a fair, efficient and inexpensive manner for resolutions to trade disputes;
    6. The maximum average work week is 48 hours (including overtime) over a 4-month period, although the general standard working week determined through collective agreements is 39 hours. Overtime rates of pay are all determined through collective agreements; for example, the current registered employment agreement for the construction industry provides for overtime rates of pay of time-and-a-half until midnight Monday to Friday and double time thereafter.
  • Did you know about Ireland?

    1. The Irish Government is very welcoming of multi-national companies because
      • Almost 1,500 companies have chosen the country as their base to do business, not just those from throughout Europe, but worldwide.
      • Overseas companies located at present account for approximately 88% of all Irish
        exports.

Contact us

For additional information on our business registration services in Ireland, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar
Ireland department of foreign affairs and trade Dublin chamber of commerce Central bank of Ireland Chambers Ireland - in business for business Chartered accountants Ireland Ireland companies registration office IFSC Ireland Immigrant council of Ireland Irish naturalisation and immigration service - department of justice and equality Inter trade Ireland - cross border business development and business support Ireland department of finance