Ireland is consistently ranked as one of the best places worldwide to set up and run an international business
For decades, Ireland has managed to attract investment by many of the world’s largest technology and innovation companies and is now home to:
- 7 of the 10 biggest global software companies;
- Almost all of the world’s leading pharmaceutical and medical tech companies;
- 19 of the 25 largest financial services companies;
- Most of the leading gaming and online betting companies.
There are many reasons why so many innovative global businesses have chosen Ireland as their site for European headquarter operations. The main reasons include
- Tax: Ireland’s corporate tax rate for trading businesses is 12.5%, though with R&D tax credits the effective rate is often lower for technology companies. Ireland also enjoys double taxation agreements with over 70 countries worldwide, including Israel.
- Education: Ireland has one of the most educated workforces in the world. The share of 30-34 year olds in Ireland with a third level qualification is 53.5%, compared to an EU average of 40%.
- EU Membership: Ireland is the only English-speaking country in the Euro Zone and will, following Brexit, remain the only English-speaking EU Member State.
- Workforce Productivity: According to the OECD, Irish workers are now also the most productive in the world, adding an average of $99.50 (€87) to the value of the economy every hour they work.
- Employment Rules: Ireland maintains a pro-business, employer-friendly regulatory environment compared to other European jurisdictions. There are low levels of private-sector unionization.
- Ease of Business: Incorporating a new Irish company is a straightforward and quick procedure. The World Bank’s recent ‘Doing Business’ report rates Ireland as one of the easiest places in Europe to start a business.
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- Most Irish companies are Private Companies Limited by Shares (‘LTD’). However, foreign businesses often also choose to run their Irish operations through a Designated Activity Company (‘DAC’), setting up a Branch or by way of a Partnership (in cases of joint venture).
- It takes roughly a week to incorporate a new Irish company once the papers have been filed with the Companies Registration Office (‘CRO’). There is no requirement to open a bank account at the same time.
- An Irish company can be established with as little as €1.00 in issued shares.
- LTD companies can incorporate with a simple one-page constitution – there is no longer a requirement for an “objects clause” and, therefore, the company may engage in any lawful activity.
- Responsibility for the management and control of an Irish company lies with the board of directors which, in turn, is answerable to the company’s owner(s) – the shareholder(s). There is no requirement for directors to own shares in the company.
- A private company limited by shares may have a single director. Every other type of Irish company must have at least two directors. All directors must be living humans – corporate directorship is not possible.
- All Irish companies must have at least one director who is ordinarily resident in the European Economic Area (‘EEA’). There is no requirement that this director be a citizen of any EEA country. If the company has no EEA-resident directors, it must file a bond (a type of guarantee or insurance) with the CRO, which costs around €2,000 and covers the company’s liabilities to the CRO for a period of 24 months.
- Companies must also appoint a Company Secretary upon incorporation. The Company Secretary, responsible for the company’s administration, may be a corporate entity (such as an accountancy or law firm).
- LTD companies require at least one shareholder, with a maximum of 149 shareholders. There are no formal restrictions on foreign ownership of Irish companies or investment in Irish operations. In practice, however, it is often challenging for companies with major shareholders resident in certain ‘high risk’ jurisdictions to set up corporate bank accounts or engage with lawyers or accountants.
- Company administration is fairly straightforward and low cost in Ireland. A company must submit annual financial and legal reports, but many ongoing filing requirements – such as board appointments, change of address and share transfers – can be reported online without the need to execute deeds or attendance before a Notary Public (as in many European jurisdictions).
- A major benefit of setting up in Ireland is that investors can take advantage of the Small Company Audit Exemption – startup companies, with a turnover of less than €12m, may not have to file costly auditors’ reports.
- Once incorporated, the company would need to register for taxes – this is a simple procedure which an accountant can assist with.
- An often overlooked benefit to establishing an Irish company is the relative ease with which the company can be later voluntarily struck off by the board and shareholders, if required.
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