Starting a business is an exciting journey, and setting up a limited company in Ireland is a popular choice for many entrepreneurs. But why? What makes Ireland such an attractive place for business, and how does one navigate the process? Let’s take a look!
Why choose a limited company?
When you’re on the brink of starting a business, the structure you choose can significantly impact your operations, taxes, and liabilities. In Ireland, the two most common structures are sole traders and limited companies.
While being a sole trader might seem simpler, a limited company offers distinct advantages. For a more in-depth comparison, explore our article on Sole trader vs limited company. But for now, let’s take a closer look at why a limited company might be the right choice for you.
Types of companies in Ireland
Before you decide on setting up a limited company, it’s essential to know the different types of companies in Ireland:
- Private limited companies
- Public limited companies
- Companies limited by guarantee
- Unlimited companies
- Foreign companies
Each type has its own registration, governance, reporting, and compliance requirements, so choose wisely.
Advantages of setting up a limited company in Ireland
Ireland is not just known for its lush landscapes and rich history; it’s also a hub for businesses, especially limited companies. Here are the advantages of setting up a limited company in Ireland:
- Limited liability: One of the most significant benefits is the protection of your personal assets. If the company faces financial difficulties, your personal assets remain untouched.
- Tax benefits: Ireland boasts one of the lowest corporate tax rates in Europe, making it financially attractive for businesses. Additionally, there are various tax reliefs and incentives for startups.
- Professional image: Setting up a limited company in Ireland can enhance your business’s credibility, making it easier to attract clients, investors, and partners.
- Access to funding: Limited companies often find it easier to secure loans, grants, and investments, especially in Ireland’s pro-business environment.
- Ownership and succession: A limited company has a clear structure, making it easier to sell, pass on, or expand.
Setting up a limited company in Ireland: Step-by-step guide
Preliminary research
Before anything else, arm yourself with knowledge. Understand your target market, identify potential competitors, and familiarize yourself with Ireland’s business landscape. This step can save you time, money, and potential future headaches when setting up a limited company in Ireland.
Choosing a name
Choosing and registering a unique company name is crucial. The CRO has specific guidelines, and your chosen name should not be misleading or identical to another company.
Registration process
File necessary documents
This includes the A1 form, which provides details about the company, directors, and secretary. You’ll also need a company constitution, which outlines the company’s rules.
Pay the fees
As previously mentioned, this can vary based on your registration method.
Wait for approval
Once submitted, the CRO usually takes 2-4 weeks to process and approve your application.
Post-registration steps
After you have successfully registered, there are still tasks to complete:
Corporate bank account
Using a corporate bank account is essential for managing your company’s finances. Make sure you choose a bank that offers business accounts with features that suit your needs.
Tax registration
Register for corporate tax, VAT, and other relevant taxes. Understanding VAT is crucial for your business; read our in-depth guide on VAT in Ireland to get started.
Annual returns
Don’t forget to file your annual returns with the CRO, even if your business isn’t actively trading. Skipping this step could lead to financial penalties.
Choose cloud accounting software
Cloud accounting software like QuickBooks, Surf Accounts, Xero and Sage can help you keep track of income, expenses, and tax obligations.
Choose an online accountant in Ireland
At Around Finance, we offer specialized accounting services tailored for businesses in Ireland. Whether you need help with tax planning, financial reporting, bookkeeping, or setting up a limited company, our online accountants in Ireland are here to assist you.
The costs involved
While there are numerous benefits, it’s essential to be aware of the costs involved in setting up a limited company in Ireland:
- Registration fees: Registering with the Companies Registration Office (CRO) typically costs between €100-€300, depending on the method of registration.
- Legal fees: These can vary widely based on the complexity of your business and any legal consultations you might need.
- Accounting services: While you can manage your accounts, hiring a professional can range from €500 to €4000 annually, depending on the services required.
- Miscellaneous costs: This includes potential office space rentals, utilities, insurance, and other operational costs.
Grants available for new companies in Ireland
Starting a business often requires capital, and setting up a limited company in Ireland is no exception. Thankfully, setting up a limited company in Ireland gives you access to various grants to support you on your new business journey. One of the most accessible sources for these grants is the Local Enterprise Office (LEO).
Here are some types of grants you might consider:
- Feasibility study grants
- Priming grants
- Business expansion grants
For a more detailed look at these grants, check out our blog on 3 Top LEO Grants for Irish Businesses.
Tax reliefs for new companies
Ireland offers various tax reliefs for startups, especially for those setting up a limited company in Ireland. Here are some of the key tax reliefs you should be aware of:
Start-up relief for entrepreneurs (SURE)
If you meet certain criteria, you could take advantage of the SURE to claim income tax relief for up to six years.
Start-up companies- corporation tax relief
You might be eligible for Corporation Tax Relief during your first three years of trading as a new company.
Employment and investment incentive (EII) Scheme
Provides tax incentives to individuals who invest in qualifying companies.
Research and development (R&D) tax credit
If your business is engaged in qualifying R&D activities you can claim a tax credit on eligible expenditure.
Entrepreneur relief
This relief allows you to reduce the Capital Gains Tax when you sell qualifying business assets. It’s an excellent way to protect your profits as you grow your business. For a deeper understanding of Entrepreneur Relief, read our blog on Understanding Entrepreneur Relief in Ireland.
Next steps
Setting up a limited company in Ireland is a process that requires careful planning, but the benefits often outweigh the challenges. With Ireland’s favorable business environment, tax incentives, and the protection offered by a limited company structure, your entrepreneurial dreams are well within reach.
For professional help setting up a limited company in Ireland, book a discovery call with an online account in Ireland today.
FAQ
Yes, at least one director must be an EEA/EU resident. If not, you’ll need to obtain a non-EEA resident bond.
Yes, the CRO offers an online registration system called CORE but working with an online accountant in Ireland can help you avoid errors and the complexity of the application process.
You must file annual returns, even if you’re not trading, and meet all tax obligations.
Still got questions? Let us know what you’re looking for.
