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Setting Up A Company In Ireland

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Setting Up A Company In Ireland

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IRELAND Ireland is a very suitable jurisdiction for companies to be based whilst acting in commercial transactions.

There are a number of structures available which allow an Irish entity to be used in worldwide commercial transactions whilst minimising the exposure to Irish tax. It is relatively easy and inexpensive to form a company in Ireland and there are many advantages to having a company here, such as:

  • Having a company in Ireland allows you to be part of the EU in an English speaking country;
  • Access to all the EU trade & customs agreements between Ireland and other non EU countries;
  • Access to 72 double tax treaties;
  • Cross Border VAT registration with simplified administration;
  • Easy distribution of goods and services;
  • EURO currency bank account;
  • Low corporate tax rate of less than 12.50% after deductions;
  • A large variety of tax reliefs and incentives aimed at attracting foreign companies

Setting up a company in Ireland

The process for opening a company in Ireland is quite straight forward. A limited company can be formed within 3 to 5 days and costs up to €500 approximately. All the documentation can be prepared and filed from here and you just need to sign some forms and provide proof of identity for money laundering purposes.

There have been recent changes to the Companies Act 2014in Ireland which allow for a Limited liability "LTD' company to have just 1 director instead of 2. Typically a company can appoint any European resident director, a nominee corporate secretary and foreign shareholders. We would recommend that an Irish director is appointed if you need a trading company with a VAT registration in Ireland, for substance purposes.

The shareholders can be nominees who act on behalf of the ultimate beneficial owner and can differ from the directors. The names of the directors, company secretary and shareholders of a limited company are published on the IrishCompanies Registration website, whilst an unlimited company or partnership do not have to publish these details.

The accounts of a company do not legally require an audit if the turnover is below certain limits, as follows:

  • Balance sheet total does not exceed €4.4m
  • Turnover does not exceed €8.8m
  • Number of employees does not exceed 50

Every company must prepare a set of accounts and file them with the Companies Registration office once a year, these can be the abridged balance sheet only version to protect confidentiality. The company must also file a corporation tax return, VAT returns and payroll taxes on director’s fees.

The type of company structure you chose depends on the purpose of the company, e.g. Trading, Holding company, nominee, financing, licencing.

Irish Bank Account

Once incorporated in Ireland, you can open an Irish bank account to assist in your business transactions in Ireland and worldwide. Irish banks welcome new business, and will facilitate the opening of accounts for Irish companies. Once all your identity and source of funds documents are in place, all transactions are executed quickly and mostly via internet banking which you can control.

Repatriation of profits back to shareholders

The relative absence of transfer pricing, controlled foreign company laws and the large number of double tax treaties, allow for profits to be paid back to shareholders very tax efficiently. Dividends can be paid to EU/EEA countries free of withholding taxes. Licensing payments, shareholder loan repayments and intercompany cross border group transfers are just some of the ways to repatriate profits tax efficiently.

Tax reliefs is Ireland

There are many corporate tax reliefs in Ireland available to foreign investors establishing themselves here. I will mention just some of them below:

Knowledge Development Box “KDB”

Introduced in Finance Act 2015, the KDB offers a tax rate of 6.25% on profits arising from copywriting software or software patents where all the related research and development is undertaken by the Irish company.

Research & Development corporate tax credit

A 25% tax credit for qualifying Research and Development on expenditure exists for companies engaged in in-house qualifying research and development undertaken within the European Economic Area. This credit may be set against a company's Corporation Tax liability. The tax credit is available on a group basis in the case of group companies. The qualifying expenditure can be for software development and intellectual property development.

VAT – mini one stop shop

The Mini One Stop Shop is an optional scheme which allows businesses that supply e-services or telecommunications, broadcasting to consumers in EU Member States in which they do not have an establishment to account for the VAT due on those supplies via a web-portal in one Member State, such as from Ireland. Otherwise, businesses making such supplies would be obliged to register for VAT, file returns and make payments in each Member State in which they make these supplies.

Therefore you could register for VAT in Ireland and account for VAT on all your sales to EU customers in the Irish VAT return, this is a hugh saving on compliance time and costs.

12.50% Corporation Tax Rate

Irish trading companies can avail of a 12.50% corporate tax rate, after taking tax reliefs and deductions into account, it is possible to payable as little as 2% tax in the first few years. Start-up companies are offered a special zero tax regime which allows them to pay zero tax on the profits up to certain levels in the first years of trading.

Holding Company Tax Regime

Capital Gains tax exemption applies to disposals of shares in foreign trading companies where the shares are held by an Irish holding company subject to certain conditions.

Our Services

We specialise in setting up tax effective companies in Ireland. We can provide all incorporation, accounts, tax and day to day management services for your company in Ireland for a fixed fee. If you wish to find out more about setting up a base in Ireland, please do not hesitate to contact me directly.

Morita Kelliher

Principal(FCCAChartered Certified Accountant & CTA Chartered Tax Advisor)

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