Company Registration in Ireland: All You Need to Know about Maintaining an Irish Company

Ireland’s popularity among those deciding to register an LTD company is associated with a number of aspects: democratic approach, no red tape and the opportunity to minimize business costs. This article provides an overview of peculiarities of maintaining a company in Ireland.

Why register a company in Ireland

Ireland offers the lowest tax rate in Europe: limited companies in Ireland pay a corporate tax of 12.5%.

This jurisdiction is suitable for international commercial activities and IT services, as well as for production, pharmaceuticals, biotechnologies, consumer and industrial products trade, digital media and financial services.

Knowledge and Development Box IP Box

The Knowledge and Development Box (IP box) is the key advantage of having an Irish company for IT startups. Companies with annual income less than €7.5 million which is obtained from patented intellectual property may enjoy the special tax treatment. This way, 50% of the profits will be exempt from tax.

In terms of absolute value the effective corporate tax rate for IT companies would be 6.25%. This type of treatment allows small startup companies to use government benefits.

LTD structure in Ireland

A limited company must have at least one director – an individual and EU resident.

There must be at least one shareholder (individual or entity) who/which can be a resident of any country.

There should also be a company secretary whose main task is submission of annual statements. He/she will work with your accountant to ensure timely delivery of the statements.

Taxation in Ireland

Compared with other EU and CIS countries, Ireland offers a relatively low tax rate – 12.5% on trading and 25% on other income. The capital gains tax is 20% while the VAT is 23%.

Passive income such as dividends from EU countries or under double taxation agreements, e.g. the agreement with Ukraine, is subject to 12.5% tax. Overseas companies from the EU owning 75% of the subsidiary Irish company are exempt from dividend tax.

Reporting and audit in Ireland

Listed companies have to comply with the International Financial Reporting Standards (IFRS). Other companies may choose to use the IFRS or national standards.

The mandatory financial statements in Ireland are submitted to the Companies Registration Office (CRO).

Micro-sized and small enterprises with the balance sheet of up to 6 million euro, turnovers – up to 12 million euro and with the number of employees up to 50 persons are exempt from submitting full annual financial statements.

The above exemption does not apply to investment and financial companies and to a number of other company types.

SBSB lawyers will help incorporate your company, not only in Ireland but in other jurisdictions as well. We will identify the optimum solution for you as per your specific needs and requirements. By the way, you can join our Telegram chat to get a free consultation on legal matters.