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Business formation and entity choice in Ireland

What are the most common types of businesses that can be established in Ireland?

The two main types of company in Ireland are private and public companies. Most companies registered in Ireland are private companies limited by shares. This is the most popular form of business entity for inward investment projects. The shareholders of a private limited company have limited liability while public limited companies are established when securities are listed or offered to the public.

There are two types of a private limited company; an LTD company with a simplified constitution and governance structure and a designated activity company (DAC) which is used by companies who prefer to define a specific type of business in their Constitution rather than having unlimited powers like in an LTD company. 

Depending on the type of business and level of investment, foreign-owned businesses may decide to initially set up a Branch business in Ireland rather than a separate legal entity. When creating a Branch, consideration should be given to both risk and tax issues. A Branch business is more cost-efficient to establish and maintain, as the Irish filing and administrative obligations are considerably less than a company structure.

How long does it take to establish a legal entity in Ireland?

The incorporation procedure in Ireland is an extremely straightforward process. Typically, it takes approximately one week to complete the incorporation of a subsidiary or register a Branch once all relevant documentation has been gathered.

It should be noted that there are no minimum capital requirements under Irish company law in establishing an Irish company.

Tax registration in Ireland

What are the tax filing requirements in Ireland?

Corporation Tax
A company must file an annual corporation tax return, Form CT1. The company must pay preliminary tax in two instalments annually, while small companies (companies with a prior year liability of less than €200,000) may pay preliminary tax in one annual instalment. The balance of any tax payable is paid on filing the corporation tax return, which must be filed by the 23rd of the ninth month after the end of the accounting period.

VAT

VAT returns are filed on a bi-monthly basis (i.e. 6 returns per annum). The return must be filed and paid by the 23rd of the month following the VAT period of assessment.

Payroll Taxes

The Irish tax authorities operate real-time reporting for payroll taxes. Employers must submit their payroll data to Revenue on or before the date employees are paid. The return and payment of the taxes are due 23 days after the end of the month.

What is the tax authority in Ireland?

Revenue Commissioners www.revenue.ie

What is the process of applying for a tax identification number in Ireland and what is it called?

The process of applying for a tax identification number in Ireland is called Tax Registration and companies can register with Revenue by using a Form TR2, or Form TR2FT in the case of foreign companies registering a Branch. All new companies employing Irish based employees must register for employment taxes.

Other registrations

Are there any other registrations required in Ireland?

Business operating in the construction sector should consider whether they may be required to register for Relevant Contracts Tax (RCT). These applications can be made using the Form TR2.

KEY CONTACTS 

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Aidan Byrne

Partner
E: [email protected]

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Paddy Stapleton

Partner
E: [email protected]