The Emerald Isle is home to some of the biggest companies in Ireland. The island nation boasts the presence of Apple, Amazon, and KPMG and is touted as the Silicon Valley of Europe.
This is not due to a stroke of luck. Irish governments have always been pro-business and have advocated several business-friendly policies such as low corporate taxes, policies to build a knowledge economy, highly literate workforce.
Many employers reap these advantages of doing business in Ireland and perfectly position themselves to hire, scale and expand into the country.
Moreover, companies can also tap the markets of the European Union by establishing a presence in tax havens like Ireland.
Thus the advantages of starting a business in Ireland can be surmised as follows:
- Ease of business registration
- Part of the European Union
- Low corporate taxes
- Proximity to more significant markets such as the UK, Germany, France, Spain
- Consistently ranks in the top 20 if the Ease of Doing Business Index
Additionally, Ireland’s workforce is one of the highly employable workforces in the world. A substantial number of employees in Ireland complete a third-level degree.
With a highly literate workforce (99%) and stellar efforts at introducing pro-business policies, Ireland is an enticing destination to start a business.
Requirements for Starting a Business in Ireland
With the high ease of starting a business in Ireland, it is evident that employers would need minimal documents. For example, having a business plan in place would be one of the first steps to establish a direction for future processes.
To incorporate a business in Ireland, employers must ensure they have the following documents:
- Form A1
- Memorandum of Association and Articles of Association
- Constitution of the company
- Residential proof of the directors
- Letter or Status of the company
- ID proof of the shareholders and directors
Types of Business Structures in Ireland
Although business structures in Ireland aren’t different from other countries, foreign employers must understand the processes, formalities, types of liability, tax concerns, and costs to start a business in Ireland.
The Companies Act 2014 defines and governs the stipulation around the creation and functioning of these business structures. Employers need to know about these business structures before setting up a company in Ireland.
They are as follows:
- Limited company:
- Private Limited Company
- Designated Activity Company Limited by Guarantee
- Public Limited Company
- Designated Activity Company
- Company Limited by Guarantee
- Single-member company
- Unlimited company
- Ireland branch office
Kind of entity
Suitability of legal structure
Private Limited Company
Suitable for domestic and foreign business companies who need advanced company structures.
Designated Activity Company
Suitable for companies involved in charity or in management where the shareholders wish for the company’s trade to be clearly defined.
Company Limited by Guarantee
Suitable for non-profit organizations; NGOs, social clubs, and sports clubs,
Public Limited Company
Suitable for companies looking to scale and raise funds from the public
Ireland branch office
Suitable for multi-national corporates.
Ireland representative office
Suitable for companies planning to venture into Ireland
Company Registration Process
Company registration in Ireland is relatively straightforward given the business environment of the island nation. Below are the steps to incorporate a company in Ireland.
Step 1: Register the company’s name
The first step toward starting a business in Ireland begins with registering the company’s name. Applicants can do this online.
The Companies Act of 2014 mandates the applicant to ensure that the name aligns with the requirements of the Act. The applicant can look through the records of the CRO online to validate the name’s availability.
Step 2: Decide the company type
Despite a Private Limited Company being the most common form of business for people to set up business in Ireland, business forms can vary according to the purpose, level of liability shareholders want to take, and capital requirements.
Deciding on which business structure would benefit your business is crucial before you begin incorporating your company in Ireland. This saves time and avoids any confusion when registering for taxes.
Step 3: Declare beneficial ownership
Under the EU Law Article 30(1), all countries in the European Union have to comply with the Anti-Money Laundering Directive proposed by the article.
According to the directive, all companies in the countries of the EU must declare, if present, the beneficial owner to the Registrar of Beneficial Ownership of Companies and Industrial and Provident Society. The Irish chapter of this society is Registrar of Beneficial Ownership.
With respect to the directives, all companies with a beneficial owner are supposed to record the same in the Registrar of Beneficial Ownership of Companies and Industrial and Provident Society. This society or institute formed in Ireland is the Registrar of Beneficial Ownership.
Step 4: Register the place of business
All applicants must register the physical location of the business. Revenue officials will use this address for most official correspondence.
As per the Companies Act of 2014, applicants must mention the proof of location in the A1 Form, then send it to the CRO.
For all forms of correspondence, the company must have a physical place of business. The company can also have a Registered Office in the care of an authorized agent.
Step 5: Write the by-laws
When starting a business in any country, applicants must prepare the Memorandum of Association and Articles of Association.
The Companies Act of 2015 introduced the Constitution for Private Limited Companies which replaced the Memorandum and Articles of Association.
The Constitution contains the Articles of Association. Before starting a business in Ireland, applicants must prepare the Articles of Association, including details of the type of business and its objectives.
Step 6: Choose at least one director and a company secretary
When starting a business in Ireland, applicants must choose at least one director. The director is responsible for managing the company on behalf of its shareholders.
An Irish company must have at least one director who is a resident of an EEA country.
Companies in Ireland must have a company secretary responsible for maintaining the company’s books and ensuring that annual returns are filed on time.
If a company has a single director, a separate Company Secretary must be appointed. Company Bureau can act as your company secretarial mentor or become your company secretary if you require.
Step 7: Fill and submit Form A1
Form A1 requires you to give the following details:
- Company name
- Registered office
- Details of secretary and directors and their consent to acting as such
- The subscribers and details of their shares
- Memorandum and Articles of Association
The applicant/s have to submit the documents to the CRO. They have to pay an application fee as well.
How Much Does it Cost to Incorporate a Company in Ireland?
When starting a business in Ireland, employers incur costs to register their company for tax and fill up A1 forms. This can cost the employer around 199 Euros depending on the company they are registering.
Are Foreigners in Ireland on Certain Passes Allowed to Start a Business in Ireland?
Nationals of the EEA and Switzerland do not need a permit to start a business in Ireland, and they will not be required to obtain a visa to visit, travel, live, or work in Ireland.
However, immigrants outside these countries are not allowed to start a business in Ireland or indulge in self-employment. They must hold a Stamp 4 visa or Irish citizenship to begin any form of business.
To start a business in Ireland, citizens from outside EEA or Switzerland have to qualify for the following schemes:
- Immigrant Investor Program
- Start-up Entrepreneur Programme
Applicants who meet the requirements of the Immigrant Investor Programme or the Start-up Entrepreneur Programme are granted permission to reside for two years.
Their immediate family consists of their spouse, civil partner, and dependent children under 18. Some children between 18-24 will be considered for residence under the program.
Applicants can renew this permission further for three years.
Investors or entrepreneurs can apply for long-term residency after five years. Multi-entry visas can be granted if necessary for the same period.
Government Assistance for Foreign-owned Businesses
Low corporate taxes
Since the 80s, Ireland was dubbed a tax haven. Its low corporate taxes is one of the highly cited reasons for Ireland’s growth spurt two decades ago.
Companies in Ireland pay a low corporate tax of 12.5%. Companies in manufacturing pay a corporate tax of 10%.
Incentives to create and acquire Intellectual Property (IP)
Due to low corporate taxes, many entrepreneurs use Ireland to base their parent entity. This has enabled Ireland to incentivize acquiring Intellectual Property Rights.
Tax credits for research and development
Expenditures on buildings/structures used for research and development are eligible for a 25% tax credit.
A dedicated wing for starting a business
IDA (Industrial Development Agency) Ireland is a non-profit body set by the government to woo investors and enable them with information to start a business in Ireland.
IDA Ireland can offer the following assistance:
- Help entrepreneurs with data and information on various business sectors and locations
- Assistance with registering the company
- Help founders liaise with potential investors in the local industry, government, service providers, and research institutions
- Offer guidance on property solutions for international investors
Incentivized tax packages for holding companies
Among the slew of government incentives for company incorporation in Ireland, is the tax package for holding companies. The following is the list the package comprises:
- a tax exemption on capital gains from the disposals of qualifying shareholdings
- a pooling and carry forward of excess foreign tax credits
- the abolition of capital duty on equity investments
- double taxation relief for foreign branch profits
- extensive treaty network, which minimizes any withholding tax leakage
- no restrictions in terms of thin capitalization or debt capitalization
- no controlled foreign corporation rules
- limited transfer pricing rules which only apply to agreements entered into in the course of the company’s trade
- an effective tax exemption on foreign dividends with foreign tax credits available to shelter any Irish tax (further augmented by recent legislation allowing for tax credits equal to headline tax rates in respect of dividends paid by specific locations)
- A Special Assignee Relief Programme (SARP) to reduce employer’s costs in recruiting specialists from abroad to work in Ireland. This provides an exemption from Irish income tax on 30% of salary between €75,000 and €500,000 for employees that are assigned to Ireland for a minimum of one year and a maximum of five years (subject to satisfying certain conditions)
- 11 share benefits for qualifying employee share schemes.
The government may provide a cash grant for machinery and equipment, industrial premises, staff training, job creation, rent subsidies, R&D, manufacturing and exporting, and providing services to customers overseas. The amount of grant aid varies from project to project and depends on several factors.
How Multiplier Can Help?
Although the government has promoted many business-friendly policies, Ireland’s labor and payroll laws are still hard to navigate.
Also, does starting a business yourself seem worthwhile, given the high costs of company formation and the complex tasks involved?
You can outsource the registration process to a variety of partners. A big chunk of your time is taken up by haggling over who will be responsible for what.
A global employment solution will surely ease your life when you plan to start a business in Ireland to tap into a talent or test the market. With Multiplier, you can quickly enter new markets, no matter how complex, and hire great talent without worrying about compliance and labor laws.
Talk to our experts to know more.