What do you need to do to set up a company in Ireland?
If you’re setting up a “limited by shares” company in Ireland (the most common type), then here’s the quick answer:
- Incorporate the Company
- Register a Business Name (if different to company name)
- Get a Registered Office Address
- Get a Company Secretary (if you are a “one-man-band” company)
- Decide on the Share Structure of the company (may need to sort out shareholder agreements)
You will also need to do the following:
- Register for Corporation Tax (4 weeks after start trading)
- Register for VAT registration (once the sales thresholds are surpassed)
- Register the company on the Registrar Beneficial Ownership (RBO)
- Register for Employer Taxes (once you hire staff)
- File your B1 Annual Return and Financial Statements every year
1) Company Formation
Registering a company in Ireland means your company will be officially registered with the Companies Registration Office (CRO), and will therefore comply with all legal requirements. Book a discovery call to get this done.
Most companies have different requirements and could end up paying more than €1,000 with a lot of Irish company formation providers. To work out how much you will nee to pay for a company formation in Ireland, you need to understand company registration requirements.
But more importantly, keep in mind that the cheapest thing about owning a company is the fees relating to incorporation. The annual running costs are much much higher.
Let’s go through more costs associated with incorporation:
2) Company Name / Official Business Name
This may appear to be easy but it can get complicated. The complications mostly arise because you may be using a name that is already being used by an existing company. Your ideal company name may also be misleading, or profane – there are many reasons why the CRO would reject a name – but use this free tool to check if your preferred company name is suitable (below):
HINT: The more words you add the more likely it will be accepted (e.g. First Accounts is officially “First Accounts SAAS Limited”).
ANOTHER HINT: Here are some words to avoid because they are restricted: “Bank”, “University” and domain name extensions (“.com”, “.ie”, etc).
3) Registered Address
This is a mandatory requirement so that all stakeholders can get in contact with the company. While most people use their official office address, it is also common for directors to use their home address.
4) Company Secretary
The requirements for this are not as strict as they once were – but for companies with only one Director, the Company Secretary must be a different person. If you cannot find someone willing to be your company sectary, many accounting firms offer this service (under the Companies Acts 2014, the Company Secretary can be subject to fines, however unlikely they are to occur).
Unlike Company Secretaries, directors cannot be other companies, they need to be individuals. In Ireland, it is a requirement that at least one director be resident in the EEA. You will need to get a director bond if all directors are non-EEA resident (this can cost upwards of €3,000). This is essentially to cover (or insure) against the possibility of recouping fines for failure to comply with local tax regulations (up to €25,000). You can pay someone to act as a non-executive director, but all directors are liable to pay income tax in Ireland.
6) Share Capital and Shareholders
It’s best to minimise shareholder risk by keeping these low (€100 worth). If you have investors willing to buy shares, then put the remainder into Share Premium, not Share Capital.
You will need to write up a shareholder agreement, which usually gives clear guidance to the executive directors (how they should act, what they can and cannot do without further shareholder approval etc).
7) Tax Registration Costs
You may not need to register for all taxes, and you won’t need to register straight-away, but here are some quick details regarding what you should be aware of:
- Corporation Tax registration – within 4 weeks of first sale or 12 months of incorporation
- Registration of Beneficial Ownership – within 5 months of incorporation (or 14 days of any changes)
- 1st B1 Annual Return – within 6 months+28 days of incorporation
- VAT registration – if you sell more than €37,500 in services or €75,000 in goods.
- Employer Tax registration – 9 days after employing your first staff
- Corporation Tax return – file within 8 months + 23 days of incorporation
- Director Tax return – by 31st October each year
- Financial Statements – no longer than 18 months from incorporation
8) But wait, there’s more
These costs are pretty much representative of the minimal needs. You will also need to factor in the costs of hiring a bookkeeper, an accountant, a solicitor/notary (professional fees). You will also likely need to buy accounting software/subscriptions, as well as a host of other essential administrative costs (email, phone, websites etc).
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