Business in Ireland
Ireland consistently occupies a strong position in the world rankings, whether it is a list of countries ranked according to the ease of doing business (13th place, 2015) or the ease of registering a company (19th place, 2015). Moreover, in 2013, Forbes magazine recognized this country as the best for entrepreneurs, which is quite natural, because Ireland stands out among most of its competitors due to economic and political stability, progressive legislation, a large number of highly qualified professionals and a flexible taxation system.
A favorable business climate has attracted investment from the largest international companies and attracted many promising start-ups, which has given Ireland the opportunity to earn a reputation as a technology center. The government actively supports design and research developments, stimulates the development of innovative technologies. Today, the most important sectors of the economy of this state include IT technologies, the pharmaceutical industry, the production of medical equipment, electronics and engineering.
The last quarter of a century has been marked by a real economic and technological boom in Ireland, which has allowed the country to take a leading position in the EU in the field of high technologies and financial services, as well as to become an important link between Europe and America. This is where many major international money flows intersect. The global economic crisis of 2008-2009 slowed down, but did not stop the intensive development of this country, and today Ireland is a strategically important springboard for foreign companies wishing to enter the global market.
Ireland is ideal for high value production. Pharmaceuticals, biotechnology, medical technology, ICT, commerce, consumer and industrial goods, entertainment, digital media and financial services are the backbone of the country's industry.
Legal system of Ireland
Ireland is one of the most independent parts of the United Kingdom. The republic received the status of a dominion (that is, in fact, an autonomous state) at the beginning of the last century. In 1949, it declared independence and announced its withdrawal from the British Commonwealth, and already in the 70s became part of the European Economic Society. Ireland's legislation is based on the English Common Law system. The functioning of Irish firms is regulated by the Companies Act 1963 and 1990, including amendments and by-laws 1963-2012. Irish partnerships are governed by the Limited Partnership Act 1890 to 1907.
Why choose Ireland?
Ireland's international tax treaties
Double tax treaties have been signed with the following countries:
- Bosnia and Herzegovina
- Great Britain
- Hong Kong
- New Zealand
- Saudi Arabia
- Czech Republic
- South Africa
Types of companies in Ireland
For doing business in Ireland, the following types of enterprises are used:
Private Limited Company (LTD):
- Statutory fund - the standard amount is 100 euros, and it is not necessary to pay it.
- Only registered shares are allowed, which are not subject to free alienation.
- An LTD must have at least one director, and only individuals, residents of the EU can be directors (legal entities are not appointed to this position). If two or more managers are appointed, one must be an EU resident (nominal), the rest are real leaders.
- There must be at least one shareholder (individuals/legal entities), and their residency does not matter.
- The secretary in LTD is responsible for the register of shareholders of the company, his position is obligatory, and in any case it must be a resident of the republic.
- The legal address of an open company must be within the state.
- Information about directors and shareholders is kept in the public domain.
- Companies must maintain a register of beneficiaries and store it at the place of registration, without making it publicly available.
- LTD submits annual statistical and financial reports. The first statistical reporting is provided 6 months after the registration of the enterprise. Also, within 9 months after the end of the tax period (in Ireland it is 12 months), companies are required to file a tax return.
- Firms submit VAT returns quarterly.
Limited Liability Partnership (LP):
- There is no starting authorized fund in LP.
- Founders - at least two individuals or legal entities of any residency who act as partners. At least one general partner and one limited partner shall be appointed. The general partner is liable for the obligations of the company in full, and the partner with limited liability - only in proportion to his share in the LP. To simplify registration, we recommend appointing an individual as one partner, and a legal entity as the second.
- The functions of the director are usually performed by the general partner.
- An LP is established by signing a partnership agreement (it must be registered with the Companies Registry of Ireland).
- Secretary position is not required.
- All Irish partnerships are required to have a registered office in the Republic of Ireland.
- Partnerships are exempt from annual financial reporting and auditing. If the business is not conducted in Ireland and the partners are outside the state, a zero tax return must be submitted.
- Non-Resident Partners are not eligible for an Irish tax resident certificate. They are also not subject to double tax treaties.
- The LP tax number is not automatically issued, it must be requested additionally. Term of receipt - about a month after receipt by the state authorities of the relevant request
Taxation in Ireland
As a general rule, a legal entity is a tax resident of Ireland if its management and control is carried out in the territory of the country. Also, if a company is registered in Ireland, it is its tax resident. However, there is one important exception to this rule, enshrined in the Finance Act 2014: if, according to the provisions of the DTT (Double Taxation Treaties) with another country, an Irish company is considered a tax resident of that country, then it is not recognized as a resident of Ireland.
Income tax (corporate tax)
Income tax (corporate tax) from trading activities in Ireland is 12.5%. The qualifying criteria for applying the 12.5% rate are as follows (applied together):
- The company must have a real presence in Ireland, with an office and employee(s) performing key functions in the management of the company.
- The director must be resident in Ireland.
- The company must be able to demonstrate that it operates independently without constantly recourse to a foreign parent company in order to obtain instructions, decisions and directions on
- The company must be able to demonstrate that it operates independently without constantly recourse to the foreign parent company for instructions, decisions and guidance on routine matters.
- Board meetings at which key company decisions are made must be held in Ireland and be formally documented.
An Irish company is required to register for VAT if its annual turnover in respect of goods exceeds 75,000 euros and in respect of services - 37,500 euros.
- The standard VAT rate in Ireland is 23% and applies from 1 January 2012.
- A rate of 13.5% applies to land and real estate transactions, short-term car rentals, the sale of certain types of fuel, repair and construction work.
- The rate of 9% applies to newspapers and other periodicals, restaurants, hairdressing services, cinemas, museums, art galleries, etc.
- A rate of 4.8% applies to livestock and horse rental.
- A 0% rate applies to the export of goods, books, dental services, clothes and footwear for children.
Transfer pricing legislation in Ireland has been developed in line with recommendations adopted by the OECD. Persons are recognized as interdependent if the share of direct or indirect participation of one person in another person is more than 50%.
The methods used to determine the market price between related parties are the general methods developed by the OECD. According to the existing recommendations of the Irish authorities, documentation containing information on transfer transactions must be prepared by the time the annual tax return is filed.
Documentation on controlled transactions is provided to the tax authorities within 21 days after receipt of the relevant request. There are no requirements to provide such information together with the tax return.
Documentation for controlled transactions must be prepared in English or Irish.
CFC (CONTROLLED FOREIGN COMPANIES) regulations in Ireland
Exchange controls in Ireland