This article discusses what’s involved in setting up an offshore company in Ireland, why Ireland’s such a popular jurisdiction for company formation and how to take advantage of the country’s favorable tax laws and skilled, English-speaking workforce.
Using offshore companies is a popular way to reduce taxes while gaining access to new markets and talent. Ireland has proven particularly popular in this regard with many of the world’s top tech companies based there.
Are you looking for ways to plug into new markets, new talent and new opportunities while also dramatically reducing your taxes? Talk to our team of experts today and go where you’re treated best.
Why Ireland?
Ireland is one of Europe’s true success stories. Once the “poor man of Europe”, it’s now one of the world’s wealthiest countries. World Bank statistics reveal that the GDP per capita in Ireland equals 701 percent of the world’s average.
The country has benefited enormously from EU membership while also retaining access to the Common Travel Area. So while Irish passport holders don’t have access to Europe’s Schengen Area, they enjoy more rights than other EU citizens to travel and work in the UK.
Ireland also offers a low corporate tax rate of 12.5% plus a highly skilled, English speaking workforce making it particularly attractive to companies from the US and elsewhere.
Benefits of Offshore Irish Company Formation
The Irish government welcomed the formation of this type of company following the switch to a service-driven economy. These number into the thousands. When it comes to international investment, Ireland is all about the rewards, with start-ups enjoying tax relief for three years if the total amount of corporate tax payable is €40,000.
There are further tax benefits that we will now go into.
Preparing annual financial statements takes time and money. Filing audited accounts is a headache you could do without. Thankfully, most Irish companies meet the requirements for an audit exemption if they satisfy two of the three conditions in each of the previous two financial periods:
- annual turnover is €12 million or under
- the total balance sheet is €6 million or less
- employees number 50 or fewer
Avoid the Pains of Capital Gains
Irish companies become exempt from capital gains if a minimum of 5% of the shares is held for a year and the company whose shares are sold is a European Union resident or operates in one of the 70+ countries Ireland has set up double tax treaties with.
Knowledge Development Box
The Knowledge Development Box (KDB) secures a reduced corporate tax rate of 6.27% for profits arising from assets derived from research and development initiatives.
Created by the 2015 Finance Act, the KDB’s another sign of Ireland’s commitment to innovation and creating a favorable tax residence.
No Withholding Tax
As a result of a 0% dividend tax, Ireland does not apply withholding tax in Europe or with one of the countries it has established double tax treaties with. This means dividends end up in the shareholders’ pockets rather than with tax authorities.
Offshore Irish Company Formation
Company formation in Ireland starts and ends with the Companies Registration Office (CRO). Here, you can register a company, business name (trading name), foreign company (external company), or limited partnership.
Register Your Company Name
Currently, you need to account for the fact that, owing to a backlog; it can take up to five weeks to register a new company name.
You will need to register a business name if:
- the trading name is different from your actual factual surname
- your company’s business name differs in any way from the actual factual names of all partners who are individuals and the corporate names of all partners who are bodies corporate
- your trading name isn’t the same as its full corporate name
- you are launching a newspaper
To register a business name that can’t include limited, ltd, teoranta, teo, incorporated, inc., or company in the title, submit one of the following forms, along with the registration fee of €40 for paper filing/€20 for electronic filing to the Companies Registration Office within a month of generating the trading name:
- Form RBN1 for individuals
- Form RBN1A for partnerships
- Form RBN1B: for body corporates
You will receive the digital certificate by email.
Company Registration
Complete and submit Form A1 together with a constitution. You can carry out limited company incorporation digitally with the Companies Registration Office’s Companies Online Registration Environment (CORE). They will issue a certificate of incorporation within five working days.
Form a1
Form A1 requires you to give details of the company name, its registered office address, information about the company secretary and company’s directors, and full disclosure of the shares owned by corporate shareholders. If you wish to incorporate a new company, you need to classify the principal activity of the company using the NACE classification for economic activities.
constitution
For a private limited company, the constitution consists of a one-document constitution. All other Irish company types have a constitution, including a memorandum of association and articles of association.
Fé Phráinn
This is the Companies Registration Office’s standard Irish company incorporation scheme.
Under this scheme, the Companies Registration Office issues a certificate of incorporation within ten working days. Membership of the Fé Phráinn scheme does not create a partnership, relationship, or joint venture of any kind between the Companies Registration Office and the member.
Irish Company Types
Limited Company
Here, shareholders own the shares in a company. If the company’s a limited liability company, the shareholders’ liability, should the company go bankrupt, is limited to the amount, if any, remaining unpaid on the shares held by them.
A company is a separate legal entity. Only the limited liability company can be sued for its obligations rather than the people who run it. There are many different limited company types, including the following.
Private Limited Company
This is a private company limited by shares. The members’ liability, if the private limited company goes bust, is limited to the amount, if any, unpaid on the shares they hold.
You are allowed a maximum number of 149 members. A private limited company can have only one director if it chooses. As a private limited company does not have stated objects, it can undertake any activity.
Designated Activity Company Limited by Shares
The members’ liability, if the company is terminated, is limited to the amount, if any, unpaid on the shares they hold. There is a maximum number of members. This type of company must have at least two directors.
Designated Activity Company Limited by Guarantee
The members have liability for any amount, if any, that is unpaid on the shares they hold and for the amount they have contributed to add to the assets of the company in the event that it fails. There is a maximum number of 149 members. This type of company must have at least two directors.
Single Member Company
A single-member company is a company that is incorporated with one member or whose membership is reduced to one person. However, the company must have at least two directors and a company secretary unless it is a private limited company. In this case, company formation could be possible with at least one director.
With a sole member, there’s no need to hold General Meetings, including the Annual General Meeting (AGM). But you will need to prepare and forward the financial statements and reports to the member you would normally present at the AGM.
Unlimited Company
In an unlimited company, there’s no limit placed on the liability of the members. This Irish company can be either public or private.
Undertakings for Collective Investment in Transferable Securities (UCITS)
UCITS are public limited companies. The sole objective of a UCIT is the collective investment in transferable securities of capital raised from the public operating on the principle of risk-spreading. The competent authority, which needs to approve all registrations of UCITS that wish to carry on activities within Ireland, is the Central Bank of Ireland.
European Economic Interest Groupings (EEIG)
EEIGs allow businesses within the EU to engage in cross-border commerce. The purpose of an EEIG is to facilitate or develop the economic activities of its members. An EEIG must have a minimum of two members, who may be companies or natural persons from different Member States. The manager of a Grouping may be a natural person or a body corporate.
Go Where You’re Treated Best
Irish company formation is, as you can see, not exactly easy. It is an intricate process, which is where we come in. Our specialist team can help register new companies at the Irish Companies Registration Office or elsewhere in the European Economic Area.
We help you go where you’re treated best.
Irish Company FAQ
Ireland is host to many of the world’s biggest companies, including Google, Facebook, Microsoft, Dell, Amazon and Pfizer.
The corporate tax rate in Ireland is 12.5%.
