First, Ireland occupies one of the best economies in Europe. Due to the strong presence of international companies in their territory. The standard of living of its inhabitants is optimal, and it currently has positive macroeconomic indicators.
It should also be mentioned that there is the Republic of Ireland and Northern Ireland. The latter is controlled by the United Kingdom (England, Wales, Scotland and Northern Ireland).
This article will be relevant in the Republic of Ireland, whose capital is Dublin and does not depend entirely on the United Kingdom.
- Impact of Brexit in Ireland.
- Prior to wanting to invest in Ireland, I tell you these data regarding your current economy:
- What types of businesses are profitable in Ireland?
- Incentives to encourage foreign investment in Ireland.
- Visas in Ireland
- Types of companies in Ireland.
- Limited society:
- Single member company:
- Unlimited companies:
- Commitments for collective investment in transferable securities (UCITS):
- European economic interest groups (EEIG):
- European Societies (SE):
- Steps to open a company in Ireland.
- Taxes in Ireland.
Impact of Brexit in Ireland.
Although the Republic of Ireland does not belong to the United Kingdom, but has strong relations with it. Not to mention that they share an important maritime border, which is the Irish Sea and in the north with Northern Ireland. That is why it is necessary to name the subject of Brexit.
Brexit was recently approved, which puts the development of economic relations with the European Union a little uncertain. Since it has barely entered into a period of conciliation and discussion on tariff, fiscal, commercial matters together with the United Kingdom and the countries that make up the European Union.
That period can last between nine months and one year, but while foreign investments are endangered by Brexit. Although there is a rumor (not yet confirmed) that import and export tariff rates would be equal to zero, promoting free trade in the European continent, but that remains to be seen.
In addition, there is a detailed prior agreement in the newspaper El País, at the end of the year 2019, which says that the territory of Northern Ireland will be part of the Customs Union of the United Kingdom, but must comply with the rules of the European Single Market. While the Republic of Ireland will continue to be part of the European Union in commercial and tariff matters.
This agreement tries to avoid a complicated border on the island of Ireland through a solution that only encompasses Northern Ireland, to avoid restrictions on the free movement of people and goods between Ireland and England.
Although the parliament of the Republic of Ireland must make final decisions on this issue during the transition period of Brexit. But while we consider it convenient to invest here.
Similarly, the Irish Department of Business, Business and Innovation has developed a “Brexit Readiness Checklist” to help companies identify the steps they must now take to prepare for commercial and tax matters. The checklist includes a list of supports available to companies, along with the contact details of the agencies that administer these supports. To access more information about this enter here.
Prior to wanting to invest in Ireland, I tell you these data regarding your current economy:
- Its official currency is the Euro, so it is a strong currency to invest and that does not represent devaluation risks.
- It has an IPC Consumer Price Index of 1.3%, this is according to the Expansión portal.
- In reference to the Gross Domestic Product GDP, the annual indices for 2019 have not yet been calculated, but for the last quarter it was stipulated in 17.864 million euros, based on what was published in Expansión.
- Inflation reached a rate of 0.94% according to the Inflation.EU portal.
There you have a general scheme of the economy in Ireland, despite Brexit’s uncertainty, its economic indexes are quite encouraging. All these data will help you to make the financial viability if you want to invest in this country.
What types of businesses are profitable in Ireland?
The Republic of Ireland is one of the most important technology centers in Europe. Because it has companies that are leaders in technology, in addition to the fact that the largest percentage of its population is young.
So you have to guide your business in this country, mostly to young people who are loyal consumers and users of digital content, and the latest technology devices.
Among the most profitable businesses we have:
- E-commerce, woocommerce and online stores: they are one of the most used and profitable business trends at the moment, since it does not require a physical space to transact buying and selling operations. You can simply open a website, buy low-cost merchandise and resell it, and earn a fairly significant profit. You do not need a large investment and it is a company that you can easily open in this country.
- Sales of electronic equipment and devices: derived from the previous point you can set up an online or physical store of electronic devices and equipment. The sales percentages of these products are very high in this country, more, however, you must take into account that you must always make a significant investment in replenishment of inventory. Because the updated inventory is the one that is sold and the technology is in a hurry. So to set up this type of business you must be constantly updated, because the market is quite demanding.
- Repair and maintenance of electronic equipment and devices: Although the young population loves to acquire the latest technology, there is another percentage of the population that prefers to give more prolonged use to their equipment or devices. This type of business is very profitable in Ireland since, to save expenses on acquiring new products of technological range, people request repair or maintenance of their equipment. So if you know how to repair these devices, go ahead and do it in Ireland.
- Start-Ups: these types of companies have a great boom in Ireland, they are the ones with the highest economic growth rate in that country. In addition, that in Ireland with regard to its tax legislation, these companies benefit from favorable tax incentives, so that people invest in this type of business.
- Merchandise exports: in Ireland there are programs that help people to undertake aspects of merchandise exports, this is done so that Ireland is well positioned in the global economy and that its contribution to global finance is valued. The most privileged exports are technology, pharmaceutical and chemical products.
- Online advice: given that the services and procedures in Ireland are handled online, it is a great opportunity to soak up them and offer a specialized consulting service, whether in legal, accounting, financial or social media matters. In addition, you can help encourage more people to invest in Ireland, as well as advise young entrepreneurs.
- Online travel agencies: the people of Ireland love to travel and get to know the rest of the countries of Europe, whether for tourism or business. This is a great opportunity for you to manage tickets and tourist packages online to the Irish, this business is very lucrative and does not require so much investment.
- Worker selection and management services: this is a highly demanded business in Ireland. Because companies outsource other companies to take care of a process that can be long and tedious, but of great relevance to them, since it implies the evaluation of each professional profile based on the needs of the companies. So, if you have an expert eye for this, you can invest in it.
- Content generation for web portals: if you are good at writing or designing content for internet portals, you have this market won. Because companies and people in Ireland demand enormously this type of services to be noticed on the internet, and get more customers and profits.
If you are a skilled person in learning about the internet, the world of technology or if you love providing advice through digital media, Ireland is for you. In addition, the aforementioned economic activities have tax incentives, which you can check here.
Likewise, if you consider yourself an entrepreneur with more resources or more industrialized, you have to advise on the requirements and regulations in force in Ireland to carry out activities related to energy, communication services, water treatment, among other sectors. You can visit this link.
Incentives to encourage foreign investment in Ireland.
In Ireland there are different types of incentives, which boost investment, among which we have:
- This is the Microfinance Ireland that grants loans, with considerably low rates, to small businesses with fewer than ten employees, incorporating unique merchants and new businesses. In addition, they provide loans of between two thousand and twenty-five thousand euros, which are for commercially viable proposals.
- The Credit Guarantee Plan is one that aims to promote additional credits to small and medium-sized businesses, which are commercially viable. But they have trouble getting loans. According to this plan, applicants will obtain support to obtain credits and establish a good credit history.
- Scheme of online commerce coupons, this scheme grants coupons of up to two thousand five hundred euros, are given to companies that state that they have a viable plan to operate online. This is ideal to encourage online stores.
- Credit Review Office: If you have a small or medium business and find it difficult to obtain financing, you can send a request to this office. The request must be made in writing, the review costs between one hundred and two hundred and fifty euros.
- JobsPlus is an incentive for employers who encourage and reward other employers who hire those looking for work in the Irish Live Registry. It is like a community network of employers.
- Tax credit for R&D activities (Research and Development): it is a tax credit whose rate is 25%, applied to Research and Development expenses, for companies registered in Ireland. The tax credit applies to both basic and applied research and experimental development activities. This tax incentive will not apply to those activities that have public funding, although partial funding is admitted with a maximum limit of one third of public funds.
- Corporation tax: Ireland has a company tax rate of 12.5%, one of the lowest rates in the European Union. Also it is necessary to mention that the passive income or the income that the company receives originated from the profitability of unmanaged assets. As well as benefits generated outside Ireland, a 25% tax rate is applied.
- Intellectual property: in Ireland, intellectual property includes patents, trademarks, scientific research and software. There is in this country the tax for transfers of intellectual property, called Stamp Duty. This tax is levied at a single rate of 2% for all transfers of non-residential property.
- Partnership for Innovation Program of “Enterprise Ireland”: through this initiative, financial support is offered to encourage companies to execute collaborative projects with Universities and Institutes of Technology in Ireland.
- The Back for Business program: is a development program, which for six months supports emigrants returning to Ireland to start and develop business in that country. The program is a collaborative model among peers, that is, entrepreneurs who help other entrepreneurs.
- IDA Ireland program to support Research, Development and Innovation: this initiative financially supports companies that intend to execute their first Research and Development project. Also to those that require a substantial development of their current activities of that economic activity.
Shannon Group: is the government agency responsible for the development of industry, tourism and rural sector in the area of Shannon and surroundings. It is also responsible for promoting investment in the Shannon Free Zone. Which is an international business park adjacent to Shannon International Airport and occupies 243 hectares. Where there are certain tax incentives.
Údarás na Gaeltachta: it is the regional public body responsible for the economic, social and cultural development of Gaeltacht or Irish. This area is a rural area with very little population. This agency offers grants in business development projects and job creation. As well as providing strategies for the development of the Irish language and its maintenance for future generations.
Visas in Ireland
People from the European Union, the European Economic Area and Switzerland do not require a visa or permission to invest in Ireland. However, if you do not belong to the aforementioned categories, you can request a permit to invest, which is obtained through the Immigration Investor Program and the Entrepreneurs Program.
Immigrant Investor Program (IIP)
The Immigrant Investor Program (IIP) is for those citizens, who do not belong to Europe, who have to commit to an approved investment in Ireland.
To access this program, a minimum investment of one million euros is required, coming from the applicant’s own resources, and will not be financed through a loan. The entrepreneur must commit to his business in Ireland for a minimum of three years.
Passport and visa.
In reference to the use of the passport to enter, there are certain countries exempted from the presentation of passports by their citizens to enter Ireland. Which are people from the United Kingdom and the countries of the European Union.
These people can enter with their identification card.
Regarding the visa, if you are a citizen of a member country of the European Economic Area and many other countries such as the United States, Australia, Canada and New Zealand, you will not need a visa to visit the Republic of Ireland or Northern Ireland.
South African visitors can visit the Republic of Ireland without a visa, but they will need a United Kingdom visa to enter Northern Ireland. If you have a United Kingdom visa, you will not need the Irish visa to access the country.
You can check if you require a visa to enter Ireland on this link.
Types of visas:
- Tourist visa that is valid for 90 continuous days.
- Visa for students.
- Visa for business meeting, you can check the requirements here.
- Visa for international speakers, if you want to give a conference in Ireland, you can see the collections here.
- Visa for business opening in Ireland, you must first apply for a business permit from the Department of Justice and Equality and then the visa. This can be requested at the embassy or online, for this you must perform:
- Prepare your application three months before traveling.
- Create a visa application online.
- Pay the visa application fee.
- Send your passport and other documents for processing.
- If the qualification by the Irish embassy is positive, your Irish visa will be placed in your passport within eight weeks. The procedure costs between 60 and 100 euros.
Types of companies in Ireland.
The shares of this type of company are owned by the shareholders that comprise it. Therefore, the responsibility of the shareholders, in the event that the company incurs any failure, is limited to the amount of shares they own in it. Society is independent and distinct from those who run it.
There are several types of limited companies in Ireland such as:
- Private company limited by shares (LTD company): it has limited liability and has a share capital, the responsibility of the members, if the company is liquidated, is limited to the amount. It can have between 1 and 149 members, and it can have only one director, the Companies Act of 2014 does not detail the amount in money to contribute the initial capital. The model constitution document is this Annex 1 of the Companies Act of 2014.
- A Designated Activity Company (DAC) – (limited by shares): it has the same characteristics regarding the responsibility of the company and partners, as well as the maximum number of members. Although it must have two directors. This company has the capacity and power to do only those acts or things established in its constitution. The law does not explain the amount of the share capital, but it does have the constituent document model Annex 7 of the Companies Act of 2014.
- A company of designated activity limited by guarantee (DAC) – (limited by guarantee): Members have responsibility under two titles; First, the amount, if any, that is not paid for the shares they own, and, secondly, the amount that they have pledged to contribute to the company’s assets, in case it is settled. Share characteristics of the aforementioned company. The law does not specify the amount of the share capital, but it does have the model document constituting Annex 8 of the Companies Act of 2014.
- A company limited by guarantee (CLG) (limited by guarantee that does not have a share capital): it does not have a share capital, the members are not obliged to buy shares in the company. Many charitable and professional organizations consider choosing this type of society. Since they want to ensure the benefits of a separate legal personality and limited liability, but do not require fundraising from members. It must have two directors, and the law does not explain neither the number of members, nor the amount of share capital, but we still have the model document constituting Annex 10 of the Companies Act of 2014.
- A public limited company (PLC): The nominal value of the company’s share capital must not be less than twenty-five thousand euros (€ 25,000), at least 25% of which must be paid in full before it The company starts business or exercises any lending power. You must have at least two directors and it is limited liability. The model of the constitution document is this Annex 9 of the Companies Act of 2014.
Single member company:
It is a company that is incorporated with a member or whose membership is reduced to a single person. However, the company must have at least two directors and a secretary. All types of companies can be single member companies. Above all, professional associations use them as engineers and accountants.
It can be public or private. In this type of companies there is no limit to the liability of the members. Creditors may turn to shareholders regarding the liabilities owed by the company that the company has not met. When it is public, it may or may not have social capital, and in the case of the private one, it must have capital.
The model of the constitution document will depend on the type of unlimited company:
- Unlimited private companies are in Annex 11 of the Companies Act of 2014.
- Unlimited public companies that have a share capital, is stipulated in the Companies Act of List 12 of 2014.
- Unlimited public companies that do not have share capital are in Annex 13 of the 2014 Companies Act.
Commitments for collective investment in transferable securities (UCITS):
They are corporations incorporated under the Regulation of the European Union. The only object is the collective investment in transferable capital securities obtained from the public that operates according to the principle of risk distribution. The constitutive document must be based on the provisions of Annex 16 of the Companies Act of 2014.
European economic interest groups (EEIG):
It is a mechanism through which European Union companies can participate in cross-border trade in Ireland. The purpose of these groups is to facilitate or develop the economic activities of their members. This type of company must have a minimum of two members, which may be companies or individuals, from different Member States. The manager can be a natural person or a corporate body.
European Societies (SE):
It is a limited liability company, and is registered under separate legislation. Which can be formed by merger or as a holding or subsidiary company or by conversion of a corporation to this type of company.
Steps to open a company in Ireland.
To open companies in Ireland, it can be done through three schemes:
- To write based on the constitution formats established in the Companies Act 2014, the constitutive document, depending on the type of company.
- Define the following aspects:
a. Company name.
b. The registered office of the company.
c. Disclosure and publication requirements.
d. Activities in the state.
e. Company Officers
- Gather the money or assets that will make up the capital.
- Have the identity documents of the company’s partners.
- Obtain and complete Form A1.
- Reserve the name of the company, you can do this online and pay a fee of € 25. The name can be reserved only for 28 days.
- Go to the CRO (Business Registration Office) office located in Dublin and present the necessary documentation.
- This procedure takes approximately 25 days.
This process simplifies the incorporation of the companies required for immediate commercial use by the promoters of the company.
Under this scheme, the CRO (Business Registry Office) guarantees participants that they will receive a certificate of incorporation within ten business days after the correct completion of the relevant documents and their presentation in the CRO (Business Registration Office ).
The scheme applies to: private companies limited by shares, unlimited companies and companies limited by guarantee.
The steps are the following:
- Obtain and fill out the Fe_phrainn.pdf form
- The promoters of the company present a draft constitution, memorandum and articles of association to the CRO office (Business Registry Office) for approval.
- The CRO (Business Registry Office) approves the documentation.
- The draft is printed by the applicant, according to the specifications of the CRO (Office of Business Registration), and becomes the standard text with which all future applications will be examined. While the CRO (Business Registry Office) keeps a copy of the printed version of the memorandum and the articles to compare it with the requests received from the participants.
- This procedure takes 10 days.
It is an online scheme of incorporation of the company, designed to facilitate businessmen who demand a rapid incorporation of the company. This is applicable for limited liability companies LTD. Everything is done on the portal of CRO (Business Registry Office).
The steps are the following:
- Prepare based on the constitution formats established in the Companies Law 2014, the constitutive document.
- Reserve the name of the company, you can do this online and pay a fee of € 25.
- Obtain and complete the following forms:
a. Form LP1 (Application for registration of a limited company), this form must be signed by general and limited partners.
b. Form LP3 (Declaration of the capital contributed by the limited partners), declaration of the capital contributed by the limited partners. The form must also be signed by any of the general partners.
- The presentation of the documents must be accompanied by a payment through a check payable to the CRO (Business Registry Office), the cost of this procedure is € 32.80. Because you can’t pay online, because that part of the portal is under maintenance.
- This procedure can last 5 days.
Taxes in Ireland.
There are quite a few types of taxes in Ireland depending on the economic activities carried out by companies, but mainly they can be subclassified as follows:
There are direct taxes:
The rate is 12.5%. It should also be noted that, to the passive income, or the income that the company obtains from interest, investments, royalties and property income, as well as to the profits generated outside Ireland, a rate of 25% is applied.
Capital gains tax
This tax is levied after the sale of assets and has a 33% rate.
RCT- Relevant Contracts Tax
This tax is applied to the conclusion of contracts from construction and its rate is 20%. It applies to the total value of the outsourcing contract.
Local Property Tax
The tax rate has been established in the following terms: 0.18% on the market value of real estate of up to one million euros, and 0.25% on the amount exceeding one million euros.
VAT Valued Added Tax
In Ireland it is that tax that taxes the purchases and sales of goods and services, has five rates depending on the products or services that are exchanged.
- 23% is the standard rate
- 13.5% reduced type 1
- 9% reduced type 2
- 4.8% reduced type 3
- 0% is the zero rate
You can check more information about this tax here.
Capital acquisition taxes.
Capital acquisitions in Ireland are taxed at a general rate of 33%.
This tax mainly applies to documented acts. As for property transactions, a rate that varies from 1% to 9% is applied depending on whether the property is residential or not and also depending on the date of purchase and disposal of the real estate.
Alcohol and tobacco tax (excise duty) and registration tax
This tax levies the purchase and sale of alcoholic beverages and tobacco, there are 19 fees associated with this tax, because it depends on the type of beverage or tobacco and its volume, in addition to the annexed rates ranging from 0 euros to 850 euros , the table with that information, you can check it here.
The registration tax ranges between 22.5% and 30% of the purchase price of the car depending on the size of the engine.
In conclusion, Ireland looks quite attractive to invest in technological and development activities. The important thing is to be cautious with the Brexit transition period, to expect more concrete measures and situations, about the development of Ireland’s commercial relations with the rest of Europe and the world.
Atte .: Mariajosé.
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