Business entities in Ireland
Ireland offers various types of corporate structures for local and foreign entrepreneurs willing to setup a business in this country. The one most commonly used for Irish business setup is the private limited company. Healy Consultants will assist whenever needed our Clients to choose between other business entities available in the country, including i) public limited companies ii) limited liability partnerships and iii) a branch or a representative office of our Clients’ existing oversea company.
The Ireland limited liability company (private limited company)
- The Ireland limited liability company (locally known as a private limited), can be registered with only i) one shareholder ii) a minimum share capital of €1 and iii) one director. While the owner(s) can be foreigners and are not required to live in Ireland, at least one director must be ordinarily resident in Ireland or another EEA country, unless our Client is willing to deposit a bond of €25,000 with the Irish Business Registrar. If needed, Healy Consultants can provide nominee services to enable our Client to legally comply with this obligation;
- All Irish companies must also appoint a resident company secretary and have a registered address in Ireland. They are also required to file each year i) a company return and ii) their financial statements with the Ireland Government. They are however exempted from audit requirements if they are dormant or if they do not exceed at least two of the following criteria: i) less than 50 employees ii) annual turnover below €8.8 million and iii) balance sheet below €4.4 million;
Best uses for this entity:
- The Ireland private limited company is usually the optimal business entity for foreigners willing to register a small and medium sized business in Ireland. The low corporate income tax rate of 12.5% on trading income makes it also a good business structure to form a trading company in Ireland.
- Investors looking to register a cryptocurrency trading company prefer to incorporate an LLC due to flexibility.
The Ireland Special Purpose Vehicle (Section 110 company)
- Ireland regulations allow businessmen and corporations to establish special purpose vehicles (SPVs) to hold real estate, subsidiaries and other types of Irish and overseas assets. The procedures to do so are to i) register a limited liability company (or another type of business entity) then to ii) apply for SPV status with the Ireland Central Bank;
- Before granting SPV status, the Central Bank will require evidence the company i) manages assets worth a minimum of €10 million and ii) is controlled by a majority of Irish residents. If needed, Healy Consultants can assist our Clients with nominee services for passive professional resident directors;
- The main advantage of SPV status is a reduced corporate income tax rate of 12.5% on investment income (whereas other companies are subject to a 25% rate). The company will also have access to Irish double taxation avoidance treaties to reduce international taxation on income distributed to overseas owners;
Best uses for this entity:
- The Ireland SPV is used as a holding vehicle for assets owned by multinationals and high net worth individuals;
- Specifically, for property investments Ireland provides businessmen with the opportunity to open an investment fund. Furthermore, a real estate investment fund is tax exempt from capital gains, stamp duty and withholding tax remitted locally or overseas;
- Another type of financial company is the IFSC licensed entity. This business vehicle can offer international financial services, and benefits from the same low corporate tax of 12.5% and no withholding tax on interest payments.
The Ireland public limited company
- Irish Public limited companies (PLC) requires a minimum of i) seven shareholders ii) two directors, one of whom must be Irish resident and iii) a minimum issued capital of €25,000, 25% of which must be paid-up before incorporation;
- Irish PLCs are required to appoint an external auditor and to file audited financial statements every year with the Companies Registrar. Additional requirements apply if they want to issue transferable shares or to get listed on a stock exchange;
- Best uses for this entity: The Ireland public company company is usually the optimal business entity for entrepreneurs willing to raise finance to fund a project. It is also the only business vehicle which can be introduced on the Ireland Stock Exchange.
The Ireland company limited by guarantee
- The Ireland company limited by guarantee is a business vehicle similar to a company limited by shares, the main difference between the two entities being that promoters do not have to acquire shares and are only required to pay up their guaranteed contribution if the company is wound up;
- Best uses for this entity: This entity is usually used to start a charity in Ireland, and other types of nonprofit businesses.
The Ireland limited liability partnership
- A limited partnership is not a separate entity. It is formed by a minimum of two persons, who can be individuals or corporates. At least one of the partners must be a general partner, subject unlimited liability for any loss suffered by the partnership, while the other partners can be limited partners, liable only to the extent of their contribution upon Ireland LLP registration;
- While the partnership is a tax transparent entity, not subject to corporate income tax in Ireland, it still must submit an annual return and a tax return to the Irish authorities. Partners must also include the income derived through the partnership in their personal income tax statements;
- Best uses for this entity: The main advantage of a limited liability partnership is that the entity is tax-transparent. The requirement to have one general partner with full liability can be legally circumvented by appointed a limited liability company as corporate general partner.
The Ireland branch
- Foreign corporations are allowed to register a branch of their company in Ireland, by appointing a resident representative of their Group in Ireland and providing the authorities with a business address in Ireland (which can be only a registered address, with or without virtual office services);
- Like Irish companies, Irish branches of foreign companies are required to submit each year an annual return and their financial statements to the Irish Companies Registrar. They can also be subject to an audit;
- Best uses for this entity: Branches are a good business entity for Clients willing to simplify the preparation of their financial statements at the Group level. They are also a convenient way to comply with high paid up capital requirements to offer banking services, financial services and other types of regulated activities.
The Ireland representative office
- While Ireland regulations allow foreign companies to open a representative office, such business entities are not allowed to pursue production-related or commercial activities in the country. Consequently, this entity can only engage in i) market research and ii) promoting the business of the parent company;
- Best uses for this entity: registering a representative office in Ireland is a good way to venture into this market, conduct a market survey and confirm the profitability of future investment projects in this country.
The Ireland free zone company
Shannon free trade zone company
Shannon free zone was launched in 1959 and is the world’s first free trade zone. The zone is 600 acres big, located next to Shannon international airport and near the town of Lumerick. The free zone is an attractive site for international distribution in Europe due to exemption from custom duties and access to air and land transport infrastructure.
Key sectors that Shannon free trade zone specializes in include: i) aviation, ii) information and communications technology, iii) engineering, iv) pharmaceutical, v) medical devices and vi) international services.
Key benefits offered by Shannon FTZ include:
- A corporation tax of 12.5% for all trading profits;
- Goods exported from Shannon to non-EU countries are exempted from custom duties;
- Goods imported from non-EU countries for processing are also duty-free;
- No value-added tax on imported goods;
- Capital grants.
Other benefits include:
- Excellent transportation network connection to Ireland main cities;
- Proximity to Shannon airport with daily connections to US and Asia;
- Highly skilled and educated workforce;
- Employment grants;
- Research and development grants.
Qualifying criteria for eligible company include i) employment creation and ii) export orientation.
Comparison table of the types of companies in Ireland
|Limited liability company||Special Purpose Vehicle||Public Limited company||Limited Liability Partnership||Branch||Representative Office||Company limited by guarantee|
|Also known in Ireland as:||LTD||Section 110 company||PLC||LLP||Branch||RO||Company limited by guarantee|
|How long to set the company up?||2 weeks||3 weeks||3 weeks||3 weeks||3 weeks||3 weeks||3 weeks|
|How long to open company bank account?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|Minimum shareholders?||1||1||7||2||Parent company||Parent company||1|
|Wholly foreign owned?||Yes||Yes||Yes||No||Yes||Yes||Yes|
|Minimum issued capital?||€1||€10 million||€25,000||€1||None||None||None|
|File annual tax return?||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Corporate bank account options?||Barclays Ireland||SCB Ireland||Ulster Bank Ireland||KBC Bank Ireland||Ulster Bank Ireland||SBC Ireland||Bank of Ireland|
|Does our Client need to travel?||No||No||No||No||No||No||No|
|Resident director/representative required?||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Minimum directors allowed?||1||1||2||2||1||1||1|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Individual shareholders allowed?||Yes||Yes||Yes||Yes||No||No||Yes|
|Resident company secretary required?||Yes||Yes||Yes||No||Yes||Yes||Yes|
|Ireland corporate tax rate on trading income?||12.50%||12.50%||12.50%||None||12.50%||None||12.50%|
|Ireland corporate tax rate on non-trading income?||25%||12.50%||25%||None||25%||None||25%|
|Annual financial statements required?||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Allowed to issue sales invoices in Ireland?||Yes||Yes||Yes||Yes||Yes||No||Yes|
|Allowed to sign contracts with Ireland entities?||Yes||Yes||Yes||Yes||Yes||No||Yes|
|Allowed to import and export goods?||Yes||Yes||Yes||Yes||Yes||No||Yes|
|Can rent an office in Ireland?||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Can buy Ireland property?||Yes||Yes||Yes||Yes||Yes||No||Yes|
|Can own equity in other Ireland companies?||Yes||Yes||Yes||Yes||Yes||No||Yes|
|Total Ireland business setup costs in Yr. 1||€8,255||€8,255||€11,105||€10,105||€9,370||€8,210||€8,255|
|Subsequent annual costs (excl. accounting and tax fees)||€2,945||€2,945||€4,945||€3,945||€2,945||€2,945||€2,945|
|Sample engagement fee invoice||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF|
Frequently asked questions
Why should I set up a small business in Ireland?There are many advantages of business setup in Ireland including i) low tax rates ii) an excellent labor force and iii) tax holiday of up to 3 years.
If I want to setup an LLC in Ireland, do I need resident directors?Yes – in most cases, an Irish LLC setup requires at least 1 resident director in the EEA. Healy Consultants can provide resident director services for Ireland business. If our Client would prefer not to have any directors in the EEA, they can deposit a €25,000 guarantee with the Irish government.
Which Irish authority deals with setting up of companies?The Companies Registration Office handles registration of Ireland companies.
What is the most common type of company that foreigners establish in Ireland?Most foreigners setup an LTD company in Ireland.
How can I set up a company in Ireland?Healy Consultants can help you set up your preferred type of business entity in Ireland. Our Ireland company setup services include i) incorporation ii) business license registration iii) immigration services iv) employment strategies v) corporate banking solutions and vi) office rental/ virtual office setup and vii) tax planning.