Doing business in Ireland
How quickly can I set up a business?
Setting up a company in Ireland is relatively fast – it can take as little as 3 to 5 days for the CRO (Companies Registration Office) to process the application however this can vary depending on the time of year.
Once incorporated a company will require a tax number. It generally takes 5 to 7 days from date of application for the Revenue Commissioners to issue the tax number. A VAT registration takes a little longer – approximately 2/3 weeks.
To register as a Branch of an overseas company, legalised and authenticated copies of corporate documents of the Parent company must be submitted to the CRO along with the relevant application. It generally takes 7 – 10 working days to register a branch but again this can vary depending on demand at the time.
What is the minimum investment needed?
There is no minimum capital requirement for setting up a company in Ireland. The standard amount of share capital is €100 however this is completely variable depending on investor preference.
How can I raise finance?
The mainstream Irish Banks offer financing options from commercial mortgages, term loans, business overdrafts, leasing and working capital finance e.g. invoice discounting.
Outside of the mainstream banks, there are an increasing number of speciality lenders, private equity firms and finance houses providing loans and investment to specific business sectors.
IDA Ireland is the Government agency which promotes foreign direct investment into Ireland and they provide a range of grant aid and funding to overseas companies looking to establish a presence in Ireland.
The Employment Investment Incentive (EII) is a tax incentive scheme where investors can receive 40% tax relief on investments of up to €500,000 in qualifying companies and is a popular source of finance for Irish start-ups.
Opening a bank account with one of the Irish banks is becoming more challenging because of the required customer due diligence checks. It is important that an overseas business can provide to the bank authenticated Anti Money Laundering documentation for its Directors. It is helpful too if the company can demonstrate a physical presence in Ireland. Where a company is part of a group, a Bank will require AML documentation for the ultimate beneficial owners of the Group Parent.
What structure should I consider?
The most common forms of business structure in Ireland are as follows:
- Branch of an overseas company
- Sole Trader
The different types of company in Ireland are listed below. By far the most widely used is the Limited Company (LTD).
- Private Limited Company – LTD
- Private Limited Company – DAC (Designated Activity Company)
- Unlimited Company
- Company Limited by Guarantee
- Public Limited Company (plc)
An overseas company may wish to ring fence its profits within an Irish subsidiary in order to benefit from Ireland’s preferential corporation tax rate in which case trading through an Irish limited company may be desirable. As against this, if a company expects to have losses in the initial period after setting up business in Ireland it may wish to consider using a Branch to offset the losses against profits in the home country.
What advice can you give me in regards to payroll and taxation requirements?
If a business is employing staff in Ireland they are subject to Irish employment law. It is therefore important that the contract of employment is consistent with Irish employment legislation.
All employers must register with the Irish Revenue Commissioners and are required to operate PAYE (pay-as-you-earn) income tax deductions from salary payments and in respect of most benefits provided to staff. There are also social insurance (PRSI) charges for both the employer and employee which are collected through the payroll.
The employer is responsible for calculating the income tax and PRSI correctly and for remitting the tax to Revenue.
Employers must operate PAYE in real time meaning that calculation of the tax and payroll reporting to Revenue must occur on each pay-day, be that weekly, monthly or other frequency.
Information on Irish personal tax rates, tax bands, allowances and reliefs is available on the Revenue Commissioners’ website.
There currently is no legal obligation on employers to make pension contributions for employees. There is a minimal requirement whereby an employer must make it possible for employees to contribute to an approved Pension Scheme or PRSA (Personal Retirement Savings Account) should they wish to do so.
BFCD Chartered Accountants provide an outsource payroll service whereby we will operate an Irish payroll on your behalf and look after your Irish PAYE obligations.
Is there anything else that I should know?
Ireland’s corporation tax regime:
Ireland has a favourable corporation tax regime the key features of which are as follows:
- 12.5% corporation tax rate
- 25% R&D tax credit
- OECD BEPS Compliant Knowledge Development Box (KDB)
- Favourable regime for Holding companies with Participation Exemptions and relief for foreign tax credits.
- Extensive Tax Treaty Network
Corporation Tax Payment and Filing dates:
Ireland operates a self-assessment tax system. All companies must file their corporation tax return to the Revenue Commissioners within 9 months of the financial year end. Companies generally pay their Preliminary Tax one month before the year with any balance of tax for the relevant year payable on the return filing date i.e., 9 months after the year end. Large companies pay their preliminary tax in two instalments, the first instalment is payable 6 months before the year end with the second instalment due one month before the year end.
In addition to its favourable tax regime Ireland benefits from having a young, well-educated workforce, being a member of the EU Single Market and Eurozone and having a stable pro-business government.
Our firms in Ireland
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As the Government implements new audit reforms and the market shifts away from the Big Four, what does the change mean for small audit clients?
From 1 April 2023, companies will need to digitally pre-notify HMRC of any planned R&D claims, and within six months of the end of the period to which the claim relates.
Congratulations to our German member firm, Kreston Bansbach, whose consulting arm Bansbach Econum, has been ranked among the top consulting firms in Germany in the Handelsblatt 2022 Best Consultants list.