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Company Formation in Ireland

Overview :

The primary focus of Ireland’s strategy to attract investment has been to create a favourable economic and fiscal environment, which is supportive of industry. Ireland’s strategy has proven successful, as in recent years there has been growing recognition of Ireland as a jurisdiction providing a stable economic environment. Ireland’s government policies have continued to provide infrastructure and support conducive to business activity.

  •  The 2008-2012 Business Environment ranking of the Economist Intelligence Unit placed Ireland 11th globally out of 82 countries, naming it as one of the most attractive business locations in the world.
  • A politically stable country and respected regulatory regime. Ireland is considered to be a low bureaucracy, low tax environment that is very supportive of entrepreneurs.
  • The World Bank’s “Doing business” Report rates Ireland as the easiest place in the European Union (EU) to start a business and as having the most business friendly tax regime of any country in Europe or the Americas.
  • Favourable demographics and consistent investment in education ensure a plentiful supply of highly qualified workers with excellent technical, language and customer service capabilities, as well as a reputation for flexibility and innovation.
  • Key aspect of the Irish Government’s support for industry and R&D is an attractive and continually evolving tax system

Tax Regime

The key features of Ireland’s Tax Regime

  • Corporate tax rate of 12.5% for active business.
  • 25% Research & Development (R&D) Tax Credit
  • An Intellectual Property (IP) regime which provides a tax write-off for broadly         defined IP acquisitions.

Ireland’s Tax Regime also offers :

  • An attractive holding company regime, including participation exemption for gains on disposals of most shares;
  • An effective zero tax rate for foreign dividends (12.5% tax rate on qualifying foreign dividends, with flexible onshore pooling of foreign tax credits).
  • An EU-approved stable tax regime, with access to extensive treaty network and EU Directives. Generous domestic law withholding tax exemptions.

Types of Entities :

Private company limited by shares :

The members’ liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold. The maximum number of members is 50.

Company limited by guarantee not having a share capital :

As this is a public company, there must be a minimum of seven members. The members’ liability is limited to the amount they’ve undertaken to contribute to the assets of the company if it’s wound up. Many charitable and professional bodies prefer this form of company, as they wish to secure the benefits of having a separate legal entity and of limited liability, but don’t need to raise funds from members.

Company limited by guarantee having a share capital :

The members (maximum 50) have liability for the amount, if any, that is unpaid on the shares they hold, and for the amount they’ve undertaken to contribute to the assets of the company if it’s wound up.

Public limited company :

This company type must have a minimum of seven members. Their liability is limited to the amount, if any, unpaid on shares held by them.

Single Member Company :

A single member company is a private company limited by shares or a guarantee company having a share capital, which is incorporated with one member, or whose membership is reduced to one person. However, the company must have at least two directors and a secretary.

Limited partnership :

A partnership consists of a minimum of two people and there’s normally a maximum of 20. Certain financial partnerships may, however, have up to 50 members. A partnership isn’t a separate legal entity, i.e. it has no legal identity other than those of its partners. The partners contribute a stated amount of capital, and aren’t liable for the debts of the partnership beyond the amount contributed.

Unlimited company :

In an unlimited company, there’s no limit on the liability of the members. Recourse may be had by creditors to the shareholders in respect of any liabilities owed by the company which the company has failed to discharge. Such a company must have a minimum of two shareholders

Time period

It usually takes 10 days to set up a business in Ireland.