Of Ireland’s many attractions, one of the lesser known and loved is the strength of the country as a destination for entrepreneurs and investors. Indeed, Ireland is, among the members of the European Union, by far the most favorable country for the creation of a company. Setting up and managing an offshore company in Ireland is relatively straightforward, and the taxation of offshore companies is very attractive.
Ireland and the formation of companies: overview
Ireland’s reputation for its favorable business environment is well established. However, the country is not considered a Tax Paradise.
The ‘Doing Business’ report that the World Bank published in 2018 proved that Ireland is the 8th best country to start a business in the world. Starting a business in Ireland is indeed easier than anywhere else in Europe, with the country ranking ahead of Estonia and the UK. While the start-up process in Ireland is similar to that in the UK, business laws are updated much more recently. Ireland therefore offers a much faster system, and very favorable to small businesses and international groups.
In addition, Ireland is the country of the European Union whose growth has been the most dynamic since 2014. Its economy which experienced a staggering 6.3% growth in 2015, and continues to be very strong today. dynamic.
This is why the country has attracted more than 700 American companies, for more than $ 300 billion in investments. Of these companies, 99% of them are SMEs.
Thanks to these favorable conditions for setting up an offshore company, Ireland has become an important point for data centers, technology campuses and the European headquarters of large companies. So many large foreign companies have established themselves in Ireland that the Dublin area is now known as “Silicon Docks”. As such, if you want to start your tech and internet business, Ireland is the place to be. Intel, Microsoft, Dell, Facebook and even Google have already established their European headquarters there, and thus benefit from numerous tax incentives.
Ireland’s advantages for opening an offshore company
The reason Ireland attracts so many companies is that opening up an offshore company there now has so many advantages.
The ease of setting up an offshore company in Ireland
Thanks to the measures taken by the country, setting up an offshore company in Ireland is both very quick and inexpensive. The creation of a business in Ireland will not require you to pay a maximum of 2600.00 euro for a complete package with a bank account, address in Dublin etc …
In addition, the deadlines are very short to create an offshore company in Ireland: less than 7 days is enough. Here is a summary table of the deadlines to keep in mind:
|Tasks to be performed||Number of days needed|
|Delivery of original social documents||Between 10 and 15|
|Opening of bank accounts||Between 14 and 21|
In other words, in less than a month your offshore company in Ireland will be fully up and running and ready to go!
An advantageous tax rate
Ireland is also an extremely favorable country in terms of taxation. Ireland is therefore considered to be the 4th most favorable country in the world in terms of taxation for companies.
With a corporate tax rate of 12.5%, Ireland imposes a tax whose rates are quite comparable to Switzerland. It is thus among the lowest rates in Europe, being 7% below the United Kingdom and 2.5% below Germany.
Additionally, if all of your activities are conducted outside of Ireland, you may also be entitled to a full foreign income tax deduction.
But if you also do business in Ireland, the country has 73 double tax treaties in place. These treaties prevent you from being taxed twice (in Ireland and in your country of tax residence)
In addition, it should be noted that the country does not apply business tax.
Finally, as dividend tax is 0%, Ireland does not apply withholding tax (Wit holding tax) in Europe or with countries that have signed a treaty, dividends can flow freely to shareholders.
But the benefits of opening an offshore company in Ireland don’t end there. Let us quote for example:
- Management in euros, Ireland being part of the Euro Zone, unlike the United Kingdom
- Access to Europe, thanks to a European VAT / EORI number
- An efficient administration
- The absence of an obligation to release the Share Capital 1 € is sufficient.
- An opportunity to maintain anonymity, through a Nominee Director and Nominee Share Holder service
- An advantageous legal form of company: Ireland uses the legal form of the Private Limited Company. The liability of shareholders is therefore limited.
- Finally, a completely credible financial center to launch its commercial activity or for a holding company
Last advantage of starting a business in Ireland, and not the least: the quality of life offered by this country. This factor, too often underestimated, must nevertheless be an integral part of your reflection. Ireland is a great place to live, with abundant countryside and a much more reasonable cost of living than in London. Finally, with its international airports, deep-water docks and reliable road network, the country is perfectly suited to business logistics.
How to create an offshore company in Ireland
As you can see, setting up an offshore company in Ireland is much easier than in many other countries. This facility is notably guaranteed thanks to the low number of conditions imposed to be able to create an offshore company in Ireland.
The conditions for setting up an offshore company in Ireland
- A single shareholder is sufficient, whether an individual or a company. 100% of the shares may well be held by a non-resident.
- The company must have at least one director, resident in the European Economic Area.
- If the director is not a resident of the European Economic Area, a guarantee (Bond) of € 1957.50 must be paid. This non-refundable guarantee is valid for two years and must then be renewed. If you are a tax resident of the European Union, you do not have to pay this guarantee.
- The minimum share capital is € 1 (if there is only one shareholder) and € 2 or more if there are two or more shareholders.
The different types of companies in Ireland
The Private Company Limited By Shares, or limited liability company
In Ireland, foreign entrepreneurs most often use the so-called “Private Company Limited by Shares” form of company. This form of company is easily recognizable thanks to the termination of its corporate name. It indeed includes the words “Private Limited” or “Pte Ltd”. This statute has the French equivalent of the limited liability company (SARL).
Here are the main characteristics:
- There is no minimum threshold of share capital;
- Since 2015, a single director, member of the European Economic Area, is sufficient;
- A separate Secretary must necessarily be appointed. He is responsible for ensuring the legal obligations of the company;
- Audited accounts must be filed annually.
The Public Limited Company
Less used by foreign investors because less flexible in terms of creation and operation, here are the main characteristics of the Public Limited Company:
- The minimum share capital is € 38,092
- It is necessary to have a minimum of seven shareholders
- At least 25% of the authorized share capital must be paid up
- Audited accounts must be filed annually
The general partnership
The general partnership has three articles of association. It exists in fact as a general partnership, a limited partnership or an investment limited partnership.
- Partnerships have unlimited liability.
- Limited partnerships have limited liability.
- Single investment limited partnerships provide double tax relief.
This last type of structure is particularly interesting for collective investment companies. It benefits from tax transparency which allows investors to obtain double tax relief.
To create such a form of company, the obligations are as follows:
- In a limited partnership with shares, the general partner must necessarily be a company incorporated in Ireland
- At least two of the directors must be Irish
- The minimum share capital is € 100,000
Accounting obligations in Ireland
In Ireland it is compulsory to keep up-to-date accounts. In addition, any company in Ireland must necessarily submit an annual statement of its accounts to the tax authorities.
Therefore, Ireland should rather be regarded as an onshore jurisdiction.
Ireland and Brexit: don’t panic!
While the UK has long been viewed as a preferred destination for many businesses, Brexit has changed things by creating a lot of uncertainty about the situation, now and in the future.
But with Brexit, Ireland remains the best choice if you want to locate or expand in Europe. Indeed, it should be noted that only the United Kingdom voted to leave the European Union. In other words, Ireland remains in the European Union and in the Euro Zone despite Brexit. It thus becomes the only English-speaking country to belong to the European Union.
While companies wishing to locate in Europe or establish European headquarters have historically turned to the United Kingdom, Brexit risks causing London to lose the attractiveness it once enjoyed. The United Kingdom will in fact cease to benefit from many advantages currently granted to businesses (Taxes, Aid, customs, Brussels authorizations, etc.)
This is particularly the case with the passport rights of the European Union. These now allow UK-based financial services companies, including foreign ones, to do business with the rest of Europe. But with Brexit, these companies are no longer allowed to perform many of their services from London. Data sharing may also be affected. UK-based companies will also lose the benefit of the free movement of European labor for skilled jobs, despite some flexibilities.
In addition, Brexit will cause the United Kingdom to lose access to the customs union and therefore to the free movement of goods with the countries of the European Union. All the advantages of the European Union’s free trade agreements (notably the reduction of tariff and non-tariff barriers) between the Union and other countries will therefore disappear. The British government will now have to establish new trade agreements with each country with which it wishes to trade, or accept the tougher tariffs imposed by the World Trade Organization. It will therefore become more expensive to import goods or resources for manufacturing, and more expensive to sell abroad.
But if Ireland is a very good option to locate across the Channel despite Brexit, it is because the country will not suffer from any of these problems. Thus, if you decide to create your offshore company in Ireland, you will continue to benefit from the advantages of belonging to the European Union, and will retain privileged access to the most important markets in the world.
Finally, setting up your offshore company in Ireland will allow you to continue to benefit from the free movement of skilled and unskilled labor, but also from various investment programs specific to the European Union.
You will understand, creating an offshore company in Ireland has many advantages. If you are planning to set up your business in Ireland, do not hesitate to approach our services and tell us about your project. We will assist you in the best possible way in developing it, and can take care of all the formalities to be completed to start your activity.
You can also trust our team and entrust us with the constitution of your offshore company in Ireland; we take care of everything and remain at your entire disposal.