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Expansion into Ireland

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Setting Up A Company In Ireland

25 May | By Smart MBS

How to set up a company in Ireland

Setting up a company in Ireland is a big decision and knowing how to get started is just as important.

We at Smart MBS, have put together a brief list of some of the major considerations for setting up your company here.

Given the importance of such decisions, and the need to make sure you are taking the most beneficial route, we would highly recommend a consultation with professionals like ourselves. In our experience, the cost incurred in hiring a company to expand your business into Ireland is more than offset by the time you save.

Here are some of the major considerations when setting up your company in Ireland.

1. Type of Company

There are several types of companies in Ireland with a Private Company Limited by Shares being the most common. Deciding the legal structure that a company will take can provide advantages such as limiting the liability, creating a separate corporate personality, and financial efficiency via tax savings. The Companies Act 2014 provides several different corporate entities to choose from. Should you need assistance navigating your options here, contact us to learn more about how we can help through our Business Expansion Legal Services.

a)  Private Company Limited by Shares

This is the most popular company type in Ireland.  The Limited (Ltd) structure has been simplified recently to make it more appealing, here are some of the changes:

  • The need for a Memorandum and Articles of Association has been removed and replaced with a simplified, one document Constitution.
  • The Constitution does not require an ‘objects clause’, meaning the company can pursue any form of business function in accordance with Irish Laws.
  • A Ltd company may have only one director, however they must have a separate secretary, consequently there must be a minimum of two officers.

b)  Designated Activity Company

  • “DACs” must have the old style two-part document consisting of a Memorandum and Articles of Association in their constitution.
  • The Constitution includes an ‘objects clause’ outlining the business’s specific functions and the doctrine of ‘Ultra Vires’ (beyond legal authority) applies.
  • A “DAC” is however not completely restricted to its original objects clause. The company can alter this clause by means of a special resolution.

c)  Public Limited Company

  • The Public Limited Company (Plc) is the only corporate structure in Ireland that enables you to publicly list shares. This can be used as a long-term source of finance. Plc’s are required to maintain a minimum issued share capital of €25,000 and provide a certificate of proof.

d)  Unlimited Company

  • Unlimited companies can be either private or public companies.
  • UCs, as the name suggests, provide no limited liability for their members who are fully liable for any debts that may be due in cases of insolvency.
  • UCs must file a Memorandum and Articles of Association that are the constitution of the company and define its activities.
  • UCs must maintain at least two directors within the company.

e)  Guarantee Company

  • GCs are limited by guarantee.

  • This type of entity remains popular with charities, sports clubs and property management companies.

  • GCs are governed by a constitution that includes a Memorandum and Articles of Association, which outline the objects of the company.
  • Liability is strictly limited to the amount the members contribute to the assets of the company as defined in the constitution.

2. Choosing a company name

  • A company name must be unique. If you chose one identical or very similar to an existing name, it will not be accepted by the Companies Registration Office (CRO).
  • Although it is possible to register a distinct trading name (a.k.a. business name) it is beneficial to use the company name as the trading name too.
  • Any company name containing the words ‘bank’ or ‘insurance’ are subject to regulations.
  • Failure to choose a unique and distinguishing company name will result in the refusal of an application to register a company. This will cause a delay in registering your new company.

3. Having a registered office in Ireland

  • The registered office of a company is where all your CRO correspondence and formal legal notices for the company will be sent.
  • The address must be a physical location. People have the right to visit the company's registered office if they need to review registers, documents and deliver documents by hand.
  • A letter addressed to the company’s registered office must be capable of being delivered by An Post, Ireland’s national postal service.

4. Appointing a Company Secretary

  • The company secretary is the communicator, facilitator, and legal advisor to the board and the company's shareholders.
  • The company secretary can be a corporate body.
  • The company secretary has ongoing communications with regulatory authorities such as the CRO and Revenue Commissioners.
  • The company secretary should be independent when providing advice, suitably qualified and aware of the rights, duties and obligations of directors, shareholders and other third parties.

5. Appointing a Director(s)

  • All Irish companies must have at least one secretary and one director in place at any one time.
  • A company cannot appoint body corporates, anyone who has been declared bankrupt or individuals who are listed as disqualified directors.
  • At least one director must be resident in the European Economic Area (EEA) however; the requirement to have at least one resident director from the EEA does not apply where the company holds a Section 137 Bond.

6. Statutory filings

  •  All Irish companies must be registered with the CRO and once approved file an annual return.
  •  Depending on the type of company you have registered, will determine the documentation to file.
  • The company’s first annual return will be due 6 months from the date of incorporation and there is no requirement to file financial statements.
  • The annual return date in subsequent years will fall on the anniversary of the first annual return date unless the date is extended or shortened.
  • In all cases, the annual return date cannot be more than 9 months after the financial year end of the company.

7. Registration for the appropriate taxes

Companies in Ireland must register with the Revenue Commissioners office in order to pay the appropriate taxes. These could include Corporation Tax, VAT and Payroll Taxes. You can find more information on our Business Expansion Tax Services by contacting us here.

8. Office facilities

A business will need an office and meeting facilities to trade from. Other facilities that will need consideration include telecommunication, call answering, and mail receipt and forwarding services. We have fully functional office space available with up to date telecoms equipment. We can even provide qualified and trained staff if required.

9. Corporate Substance

The corporate substance is a measure of how genuine the corporate presence is in Ireland. No longer can a multinational rent a small office with a name plate on the wall outside and expect to benefit from Ireland’s attractive tax rates. Some of the measures of substance include:

  • The company must be able to show they have a physical presence and are trading in Ireland
  • One of the key tests for substance is around central management and control. This considers things like:
    • Where are the board meetings held?
    • Where are the company directors resident?
    • Where are important company decisions being made?
  • Other considerations include:
    • Where is the company’s head office?
    • Where are the accounts prepared, kept, examined and audited?
If the company satisfies the criteria to demonstrate reasonable corporate substance, the company will qualify for the attractive 12.5% corporate tax rate.

If you’d like to find out more on corporate substance you can watch this brief webinar recording by our parent company Pearse Trust.

Substance Webinar CTA

In Summary

There is a lot to think about if you are an international company looking to set up or expand into Ireland.

Luckily, we have the expertise to support you on this exciting journey.

We can provide a turnkey solution at a predetermined cost. This ensures your Irish company will get up and running allow you to concentrate on running your business.

If you can want to discuss the possibility of setting up your company in Ireland, we’d be delighted to talk you through the steps. You can request a call back by filling out this form.

While you’re waiting for the call back, why not download our eBook for more information.

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Topics: tax services, business expansion

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