Business entities in Ireland in 2023
Irish business entities are useful for multi-national Clients. The most common company type in Ireland is Private Limited Company (LTD). Healy Consultants Group PLC assists our Clients to i) choose the most suitable entity, ii) agree to the optimum corporate structure, iii) legally minimise local and international tax and iv) agree to the multi-currency corporate bank account location.
This web page helps multi-national Clients understand the myriad of Irish entities available.
The Ireland limited liability company (LLC)
- The Irish LLC is an excellent low tax entity to conduct business within the EU with a VAT number.
- A tax resident Irish LLC is an excellent holding company that enjoys the benefits of i) 73 double tax treaties, ii) EU directives, iii) dividends received from EU countries that are free of Irish corporation tax, iv) dividends paid to EU resident shareholders that are free of Irish LLC witholding tax, v) sales of subsidiary shares that are exempt from Irish LLC tax, vi) dividend received from non-EU countries that are usually free of corporation tax because of foreign tax credits, vii) minimum thin capitalisation and transfer pricing rules, viii) the exemption of VAT registration because it is a native Irish holding company and ix) the sale and transfer of the shares in the Irish LLC do not suffer local capital gains tax. If properly structured, the entity is usually legally tax exempt.
- An Irish LLC can be registered with only i) one shareholder, ii) a minimum share capital of €1 and iii) one director.
- While the owner(s) or shareholder(s) can be foreign and is 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. Many multi-national Clients ask Aidan Healy to be the nominee professional, passive resident director.
- An Irish LLC setup in Ireland must also appoint a resident company secretary and have a registered address in Ireland. Healy Consultants Group PLC will supply this professional service.
- Annually, the Irish entity is required to submit i) a legal annual return to the Companies Registration Office (CRO) and ii) a corporation tax return and unaudited financial statements to the Irish Revenue Authority.
- If the Irish LLC has a permanent establishment, it is required to register for VAT and submit quarterly government reports.
- If properly structured, an Irish LLC can be legally tax exempt.
- Investors looking to register a cryptocurrency trading company prefer to incorporate an LLC due to flexibility.
The Irish limited liability partnership (LLP)
- A non-resident LLP is legally tax exempt. To enjoy this benefit, entity criteria include i) the partners need to reside overseas, ii) no customers and suppliers are based in Ireland and iii) no employees and office are located in Ireland.
- An LLP setup in Ireland must appoint a minimum of two persons who can either be individuals or corporates. At least one of the partners must be a general partner, subject to unlimited liability for any loss suffered by the partnership, while the other partner must be a limited partner, liable only to the extent of their contributions upon Irish LLP registration.
- While the partners are not required to live in Ireland, at least one director must be ordinarily resident in Ireland or another EEA country. Many multi-national Clients ask Aidan Healy to be the nominee professional, passive resident partner.
- While the LLP 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. They must produce and publish financial statements. Partners must also include the income derived through the partnership in their personal income tax statements.
- Irish law firms are now able to use an LLP corporate structure to avail of limited liability. By converting to this, the legal partners would not be personally liable for the firm’s debts, liabilities or obligations, meaning their personal assets can’t be seized.
- Best uses for this entity: The main advantage of an LLP is that the entity is tax transparent. The requirement to have one general partner with full liability can be legally circumvented by appointing an LLC as corporate general partner. Lawyers, surveyors and accountants are some of the professions that LLP was designed for as they have restrictions from their professional associations, such as setting up a limited company.
The Ireland special purpose vehicle (Section 110 company)
- Ireland regulations allow businessmen and corporations to establish special purpose vehicles (SPV) to hold real estate, subsidiaries and other types of Irish and overseas assets. The procedures to do so are to i) register an LLC (or another type of business entity) and ii) apply for SPV status with the Ireland Central Bank.
- Before granting SPV status, the Central Bank will require evidence that 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 Group PLC 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 while 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 distribution to overseas owners.
- The Ireland SPV is used as a holding vehicle for assets owned by multinationals and high net worth individuals such as financial assets, commodities and plant and machinery.
- Specifically, for property investments, Ireland provides businessmen with the opportunity to open an investment fund. Furthermore, a real estate investment fund is tax exempted 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 (PLC)
- Irish PLCs require 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.
- The Irish PLC is usually the optimal business entity for entrepreneurs who are 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
- This entity is usually used to start a charity in Ireland, and other types of non-profit businesses.
- The Irish 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.
The Ireland branch office
- Occasionally, multi-national Clients register a branch when they wish to consolidate Irish annual income and expenses with their overseas parent company. If the Irish entity is expected to be a cost centre and have annual losses, the branch results seamlessly flow to the parent company.
- The Irish branch does not have a separate legal identify but merely an extension of the overseas parent company. Consequently, the branch does not enjoy separate limited liability status. This means the Irish entity risks flow directly to the parent company.
- 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.
The Ireland representative office
- Occasionally, multi-national Clients register an Irish representative office, especially when the entity is not expected to generate revenue. Instead, the purpose of the entity is to establish an Irish permanent establishment including local employees and a physical office address.
- While Irish 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.
- The Irish representative office does not have a separate legal identify, but merely an extension of the overseas parent company. Consequently, the representative office does not enjoy separate limited liability status. This means the Irish entity risks direct flow to 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 Limerick. 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 infrastructures. The Shannon free trade zone is an excellent location, situated on the edge of Europe, and an excellent gateway for Europe to the USA.
- 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’s main cities.
- Proximity to Shannon airport with daily connections to USA and Asia.
- Highly skilled and educated workforce.
- Employment grants.
- Research and development grants.
Qualifying criteria for eligible companies 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 Legal liability? Limited Limited Limited Unlimited Unlimited Unlimited Limited 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? AIB 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 €16,580 €8,355 €10,205 €10,205 €9,470 €8,310 €8,355 Subsequent annual costs (excl. accounting and tax fees) €8,880 €3,045 €4,945 €4,045 €3,045 €3,045 €3,045 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.