Setting Up a Business in Ireland
By Conor Lupton, O’Flynn Exhams LLP
For many years Ireland has been an attractive location to establish a business/form a company and a large amount of foreign direct investment has taken place. Businesses such as Apple, Dell, Pfizer, and GSK have operated in Ireland for quite some time. In recent years there has been a further wave of companies establishing bases in Ireland such as Google, Twitter, and Facebook. Over 1,000 multinationals have made Ireland the hub of their European operations.
Some of the main reasons Ireland is chosen as a business destination are:
- Favourable tax regime: 12.5% rate of corporation tax for profits generated by trading activities in Ireland.
- Double taxation treaties with many countries.
- Well-educated Englishspeaking workforce.
- EU membership and access to EU markets.
- Strong legal and tax framework for development and exploitation of intellectual property rights.
- Stable political system.
Ireland’s legal system is based on the English common law system and is very similar to the UK, Australia, or Canada. As Ireland is a member of the EU, decisions of the European Court of Justice are enforceable in Ireland. The Irish legal system generally upholds commercial contracts between parties.
Incorporating a Company in Ireland
Most companies are set up in Ireland as a private company limited by shares (LTD). This is a simplified form of company established by the Companies Act 2014. The shareholders in these companies enjoy limited liability protection and the compliance burden is lower than public limited companies.
All the other common forms of companies are available in Ireland, such as unlimited companies, or public limited companies.
The incorporation process is quite fast and straightforward, and companies can be incorporated within five days. The company must have at least one EEA based director, or else a nonresident bond, which can be put in place by an Irish insurance company.
Management of the Company/Directors Duties
LTD’s may have as little as one director and must also have a company secretary; however, in practise, most companies have at least two directors. A body corporate can act as the company secretary. The management of the company is delegated to the directors, subject to the terms of the constitution or any shareholders’ agreement which might be in place.
Directors of Irish companies owe several duties by virtue of their role. These duties have been codified in the Companies Act 2014 and include a duty to act honestly and reasonably, to act in good faith, and in the best interests of the company.
Irish companies can indemnify their directors for liability in certain circumstances and, in addition, very often directors of Irish companies can obtain the protection of directors and offcers insurance policies.
Each company is obliged to keep adequate accounting records and file an annual return with the Irish Companies Registration Offce every year.
Legislation in Ireland offers several legal protections to employees in the area of dismissals and redundancies. These laws will apply to employees who work in Ireland, irrespective of the choice of law of their employment contract. Subject to that, there is a large amount of freedom as to what can be contained in the employment contract.
The Workplace Relations Commission is the state-appointed body responsible for dealing with most employment disputes in Ireland. It does not award costs to the successful party and, accordingly, each of the parties to a dispute bears its own costs.
Immigration Law and Employment Permits
There are several types of work permit that can be applied for depending on the type of employment. These would be required by non-EEA nationals, while EEA nationals can work in Ireland without the requirement for a work permit.
In addition to the work permit regime, there is also the possibility of obtaining a visa under the Immigrant Investment Programme or the Start Up Entrepreneur Programme. There are several different criteria for these visa programmes and different categories under which they can be applied for.
There is no legal restriction in Ireland on the ownership of property by non-residents. The Irish land law regime would be broadly similar to the UK and provides strong rights for landowners. Any material change of use of property or construction on property must have permission from the local authority pursuant to planning laws and building controls.
Given the onset of Brexit, Ireland becomes the only country within the EU with English as a first language. In summary, there are many reasons why it is beneficial for Ireland to be a good location for establishment of a company or business.
Conor LuptonGGI member firm
O’Flynn Exhams LLP
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Published: GGI Insider, No. 111, January 2021 l Photo: Madrugada Verde - stock.adobe.com