Ireland Company Formation

How to set up a Company in Ireland

Discover the essential steps and expert advice for establishing a company in Ireland. Simplify the confusing process and confidently embark on your business venture this year.

Starting your own company can be an exhilarating and rewarding process, if you’re considering establishing a business in Ireland, you’ve made a wise choice. Renowned for its favourable business climate, robust economy, and rich cultural heritage, Ireland provides an ideal environment for entrepreneurs to thrive. 

Ireland Post
Ireland Post

Setting up a company in Ireland can be straightforward as long as you fulfill all the necessary legal requirements. In this guide, we’ll walk you through the essential steps to set up a company in Ireland, demystifying the process and equipping you with the knowledge you need to embark on your entrepreneurial journey. 

Whether you have a brilliant business idea or a burning passion to pursue, Ireland’s vibrant business ecosystem awaits you, ready to support and empower your dreams. Let’s dive in!

Why Ireland Is a Popular Investment Choice?

Ireland is a top choice for foreign investors looking to enter the Eurozone market. It boasts a favourable business environment and appealing tax rates. With over 60 countries, Ireland has entered into double tax treaties, providing various tax reductions.

Ireland has the lowest corporate tax rate in Europe, set at 12.5%. Additionally, trading partners of Ireland can take advantage of its EU member states, which offers benefits such as duty-free access and protection against currency fluctuations when conducting business within the Eurozone region. 

Establishing a company in Ireland is a relatively straightforward process, made even easier with the guidance of a competent consultancy team.

Practical Steps Before Setting up A Company

Assessing the Market

Before launching your business in Ireland, it is crucial to assess the market to understand your industry and potential competitors comprehensively. Familiarize yourself with the scope and dynamics of the industry you’re entering. Determine the key factors contributing to success in the Irish market and identify opportunities for your product or service.

Identifying Your Target Audience

Ireland Post
Ireland Post

Knowing your target audience is essential for effective strategizing and resource allocation. Conduct a demographic analysis to identify the specific demographic or consumer segment that your business aims to serve. Understanding your potential customers’ characteristics, preferences, and needs will help tailor your offerings and marketing efforts accordingly.

Permission

Foreign Nationals from EEA or Switzerland:

If you are from the European Economic Area (EEA) or Switzerland, you do not require permission to establish a business in Ireland. You can proceed with setting up your business without additional legal requirements.

Non-EU/EEA and Non-Swiss Nationals :

If you are a non-EU/EEA and non-Swiss national and intend to open a business or invest in Ireland, you can apply for permission through the Immigration Investor Programme or the Start-Up Entrepreneur Programme. These programs allow non-EU/EEA entrepreneurs to obtain legal permission to operate a business in Ireland.

Choosing Your Business Structure

When incorporating your business in Ireland, you must decide on the most suitable business structure for your venture. Consider the following options:

Sole Trader:

As a sole trader, you will be self-employed without a business partner. While this structure offers simplicity, it also means that you are personally liable for any business debts. Registering as a self-employed person with Revenue is a crucial legal obligation. If you use a business name, it must be registered with the Companies Registration Office (CRO).

Partnership:

A partnership involves establishing a business with one or more partners. Each partner shares joint responsibility for running the business and is individually liable for income tax, PRSI, and USC payments on their share of profits. In business failure, all partners are jointly responsible for any debts incurred. It is advisable to have a solicitor draw up a partnership agreement.

Limited Company:

Ireland Post
Ireland Post

Setting up your business as a limited company establishes a legal separation between you and the company. In debt, creditors can only claim the company’s assets and not yours. To establish a limited company, register with the Companies Registration Office (CRO) and submit annual reports and accounts. Utilize the CRO’s CORE (Companies Online Registration Environment) to register your business name and file company returns online.

By following these steps, you can navigate setting up and running your business in Ireland efficiently and legally.

Company Registration Requirements

To start a limited company in Ireland, you need to do these five things:

  • Pick a name for your company.
  • Decide where your company’s official address will be.
  • Choose someone to be the company secretary.
  • Select one or more directors for the company.
  • Create a constitution that the shareholders sign.

We’ll explain each of these steps in more detail below: 

Choose a Company Name and Type

When setting up a limited company in Ireland, you must select a unique and easily distinguishable name that another company does not already register. Certain words like ‘bank,’ ‘insurance,’ and ‘group’ require special permission. 

Offensive or State-sponsored names are not allowed. Non-descriptive words like ‘services,’ ‘solutions,’ ‘Ireland,’ ‘International,’ and ‘holdings’ do not contribute to the distinctiveness of the name and are disregarded. The most common type of company is LTD or a limited company with shares.

Set the Registered Address

Your company must have an official registered address in the Republic of Ireland. This address will be used for official correspondence. The trading address of the company can be different from the registered office. Irish-resident directors can use their home address as the registered office.

Appoint a Company Secretary

If your company has only one director, you are legally required to appoint a separate company secretary. However, if your company has multiple directors, any one of them can also serve as the company secretary. Alternatively, you have the option to outsource this position. The company secretary plays a crucial role in filing annual returns and ensuring the timely submission of financial statements. Late filing can result in fines of up to €1,200, and the company’s financial statements may also be audited for two years. Therefore, the company secretary holds great importance.

Appointing Directors:

Ireland Post
Ireland Post

To establish a limited company, appointing at least one director is mandatory, and all directors must be individuals. In smaller companies, it is common for the directors and shareholders to be the same individuals. Therefore, it is possible to form a limited company with a single director who also serves as the sole shareholder. The shareholders appoint the directors to supervise the company’s operations, abiding by Company Law and the Constitution. 

The director’s position is open to individuals aged 18 or older without specific qualifications, except for those who are undischarged bankrupts or disqualified/restricted individuals, as they are ineligible for directorship. If no directors reside in the European Economic Area (EEA), the company must obtain a bond worth €25,000 to cover potential debts. Acquiring the bond, which costs approximately €2,000, fulfills this requirement for two years. It is important to note that UK resident directors are not considered part of the EEA.

Forming a Constitution and Shareholders:

Like directors, it is imperative to name at least one shareholder before registering a company in Ireland. Shareholders fundamentally represent the company’s owners. When forming a company, the shareholders must prepare a constitution, which all shareholders must sign and have witnessed. The Constitution outlines the company’s share capital, including:

  • Authorized Share Capital: The maximum number of shares the company can issue based on its Constitution. We recommend an Authorized Share Capital of €100,000 divided into 1,000,000 shares valued at €1 each.
  • Issued Share Capital: The actual number of shares issued to the shareholders.

The Issued Share Capital reflects the shareholder’s liability to the company. It is advisable to keep this value relatively low, typically at €100 worth of shares in total, to minimize exposure to the company. As a limited company, shareholders benefit from limited liability and are generally only accountable for the Issued Share Capital they have subscribed to. Limited companies can have anywhere between 1 and 149 shareholders.

Setting Up a Company in Ireland

Filing with CRO and Beyond

Submitting the necessary documents to the Company’s Registration Office (CRO) is essential in registering your company in Ireland. To ensure a successful registration, you must provide the following:

  • Company documentation
  • By-laws
  • Confirmation of physical address
  • Details of directors and employees
  • Information on share capital
  • Description of the company’s specialization

While filing with the CRO is crucial, you must complete three additional stages to register your Irish company.

Opening a Business Bank Account 

To proceed with the registration, you must open a business bank account. Whether you are a resident or a non-resident, Ireland permits the opening of business accounts, subject to due diligence. For Limited companies, each director must submit a signed mandate. Partnership-type companies must provide relevant documents to the bank authorities.

Required Documents for Account Opening:

  • Certificate of Incorporation
  • Proof of identity (sometimes accompanied by proof of character and a legal opinion)
  • Signed copies of the by-laws
  • Proof of economic ties to Ireland
  • Social security forms

Obtaining an Official Seal 

Ireland Post
Ireland Post

Almost there! Every business in Ireland must acquire an official company seal. This seal will be used to endorse documents approved by the Board of Directors. Additionally, it is essential to maintain Statutory Records and Registers, which document your company’s legal and statutory aspects, including director and shareholder information, as well as records of meetings held.

Registering with the Revenue Commission 

The final step in this comprehensive guide on establishing a company in Ireland is registering for taxation with the Revenue Commission. Ireland is renowned for its favourable tax and economic conditions. However, there are three types of taxes for which you need to register when applying for company registration:

  1. Corporation tax
  2. Social insurance
  3. Value-added tax (VAT)

The Irish Revenue Commissioners automatically register companies for PAYE (pay as you earn tax) and Pay Related Social Insurance (PRSI) contributions. Ultimately, you will receive a Tax Identification Number to facilitate online reporting of your annual taxes.

Following these steps and completing the requirements, you can successfully register your company in Ireland and embark on your business journey.