Home > Company formation Ireland
COMPANY FORMATION IRELAND:
Company formation Ireland is highly regarded as a sought after jurisdiction for start-ups and well established businesses as well because in general, Ireland has a very investment-friendly climate. Start-ups are relatively quick, non-bureaucratic and feasible with relatively low cost.
Ireland is an island nation surrounded by the Atlantic Ocean to the west and south, bordered to the north by the United Kingdom (Northern Ireland) and to the east by the Irish Sea. Ireland has been part of the European Union since 1973.
Despite rising labor costs, Ireland has managed to retain the majority of existing companies in the country and even attract new businesses. Thus, the focus is on innovative industries with high added value, such as sectors from bending technology. Furthermore, there is a high increase of companies in the service sector. Thus, e.g. various back-office matters of international companies are outsourced to Ireland. Call centers are also increasingly being set up by internationally active companies on the “Green Island”.
GENERAL OVERVIEW OF IRELAND’S TAX STRUCTURE:
In Ireland there is an income tax, a value added tax (VAT), and various other taxes. Employees pay pay-as-you-earn (PAYE) taxes based on their income, less certain allowances. The taxation of earnings is progressive, with little or no income tax paid by low earners and a high rate applied to middle to top earners, the top marginal rate of tax (including USC and PRSI) is 52%. However a large proportion of central government tax revenue is also derived from VAT, excise duties and other taxes on consumption. The standard rate of corporation tax is among the lowest in the world at 12.5%.
DOUBLE TAXATION – TREATIES AND AGREEMENTS
Ireland is continuously expanding its tax treaty and agreement network so as to reduce barriers to cross-border trade and investment. Ireland has currently entered into double tax treaties with 72 countries. Irish Revenue Commissioner has concluded negotiations with Turkmenistan and a new agreement is expected to be signed shortly. Negotiations for new agreements with Azerbaijan, Jordan, Kazakhstan and Ghana are in progress and the Revenue Commissioner intends to initiate negotiations for new agreements with other countries during 2015. This will facilitate future expansion and modification of group structures.
BENEFITS OF A COMPANY FOUNDED IN IRELAND
- EU membership since 1973
- Excellent infrastructure
- Low start-up and administrative costs
- Limitation of liability to subscribed equity
- Banking secrecy for legal persons
- Banking secrecy for legal director does not need to live in Ireland
- Double tax treaties with many other countries
- No mandatory minimum capital for incorporation of a Limited
- Stable legal situation and strong economic growth
- Tax-free income from patents and license income
- Effective tax burden of 12.5% of the company with proper design
- At the incorporation of the company a 3 years tax exemption, provided the profit in any of the 3 years does not exceed 40,000 euros
The biggest mistakes when starting a business abroad
Many agencies and law firms do not advise comprehensively and provide incorrect information, learn what to look for.
Gravity of the situation
Often, these law firms think foreign companies are half-silk, tax evasion is favored and mailbox companies are the leaders rather than the exception. This is true, however, only in some start-up agencies that do not have the necessary expertise. Self-proclaimed law firms that do not employ tax accountants or lawyers usually set up companies that are unlikely to operate legally. We set up and look after companies that can withstand tax audits and that are legally operated.
Is physical presence required in the country where you wish to set up your company?
You can set up a company worldwide, as long as the respective country allows you as a foreigner to acquire shares in local companies or to act as a managing director. If this is not the case trustees can be used. For example, Cyprus allows every EU citizen to own and run a business. Nevertheless, trustees can be used for the purpose of identity protection. However, it is important that the management takes place locally, in the country in which the company is to be taxable. In addition, a permanent establishment must be set up. Without these, a major tax offices around the world do not recognize the company and in the worst case would require additional payment of corporate and business taxes plus late payment surcharges. We rent you a real office and set up a permanent establishment that meets all requirements beyond doubt.
Problematic Law firms: Privacy is not regarded.
Some law firms bind customers with toggle contracts and exert pressure when the customer wants to close his company. If you are a client of a law firm that has established a legally flawed company, they can be blackmailed. Because in the case of a fiscal problem, law firms without a license are not bound by a duty of secrecy.
Migrating to a different law firm
We receive many inquiries from customers who already own a foreign company and are looking for a new law firm. The process of changing law firm is made often difficult on purpose. Therefore, we have developed a principle of trust. If you are not satisfied with us and want to change, you can do that at any time. The necessary documents (resignation letter), you receive from us standardized after founding. You are therefore protected against unexpected costs and you are free at any time to visit another law firm. So far we have not lost any customer to another law firm.
Privacy / Firm Location
Your accounting documents are kept safe with us. In addition, all electronic data is stored encrypted and accessible only by us, which are bound to a professional secrecy. All accounting records are also stored locally only. Neither authorities nor hackers are able to access this data.
There are quite a few locations in the world that do not charge taxes on companies or individuals, or only estimate a very low flat rate tax. But this can rarely be used without corresponding change of residence. If you are a resident of any major country, the relevant double taxation agreement is decisive. Providers who promise otherwise lead them to tax evasion, which in the case of discovery usually punishes severely. We advise against setting up companies in countries that have already been blacklisted by the OECD. The foundation is usually very cheap, but the tax consequences in your origin country can be devastating. Since the introduction of the automatic exchange of information between almost all major countries, an anonymous private account no longer exists.
We comply with the following code:
- Legally secure foundations
- No unexpected(hidden) costs
- No false promises
- Finding the right solution by focusing on your requirements
With this strategy, we have been on the market since 2013 and have not disappointed our clients so far, and we prioritize in keeping it that way. We strive to ensure that every client is satisfied and does not take risks with the solutions we provide for them, but only exploits legal opportunities. Starting a company that involves doing real business is more costly than a letterbox company, but it is the only way to save on taxes without risking legal action.
EU bailout - no longer for Ireland, but of great benefit to it
Ireland left the EU rescue facility in early 2014. The resulting benefit for Ireland was that the Irish government has regained much more flexibility in its freedom of choice and that EU mass rules have been removed. Thus, Ireland's competitiveness was strengthened and there was an influx of foreign investment..
Other advantages of Ireland:
- Low employer shares for employees
- Ireland is one of the tax havens
Tax structure in comparison
Here are some examples of the tax differences between a highly taxed jurisdiction versus major tax havens.
|Belgian Limited (SPRL/BVBA)||Ireland Limited Company||Malta Limited (Ltd.)|
|Profit||100,000 EUR||100,000 EUR||100,000 EUR|
|Corporate tax||33% including. surcharge tax rate 3% Totally 36,000 EUR(36%)||12,500 EUR (12,5%)||5,000* EUR (5%) Effectively reduced from 35%|
|Profit after taxes||64,000 EUR||87,500 EUR||95,000 EUR|
|Key advantages||Strong economy, highly reputed country||Banking secrecy, double taxation agreement with many countries, excellent infrastructure||Stable and growing economy, high anonymity, low start-up capital|
|Tax burden||36,000 EUR||12,500 EUR||5,000 EUR|
Company formation Ireland - That's how it works
Starting a business in Ireland is easy and the founder does not have to travel to Ireland. For the foundation only a certified ID or passport copy and a power bill is needed. Depending on the choice of bank, and also a short CV or bank reference.