Why Form A Company in Ireland?

Ireland is very attractive to foreign investment for many reasons and this article will help answer the question why form a company in Ireland?

Considerations:

The new 2014 act in Ireland makes it easier for Directors to manage a company. It is the goal of the Irish Government to make Ireland the easiest place in the world to do business. The 2014 Act consolidates 17 existing acts dating from 1963 and the goal of this new act is to cut the level of bureaucracy.
Ireland has a low 12.5% Corporation Tax rate which is one of the lowest in the world as shows our Corporation Tax comparison chart below. Corporation Tax is charged on the profits of the business in a companies accounting period. The accounting period cannot be more than 12 months. As well as a stable tax environment Irelands is a favorable one.
Ireland has a pro business environment and has a modern outward looking economy. Irelands population is made up of 40% of the population being under the age of 29. The workforce is highly educated which allows companies hire talent effectively and effortlessly.
Low Share Capital Requirement, as low as €100. With the amendment of the 2014 Act, the share capital can be structured in a way where it is kept very low. A company can be incorporated with Authorised share capital and issued share capital. Issued share capital is taken from Authorized share capital. The most common way to set up a company is with 1,000,000 Authorised shares valued at €1 each and issuing 100 shares. If there is 3 shareholders with equal shareholdings then issuing 120 shares and distributing 40 shares each. A single share cannot be split.
There is Limited Liability on Shareholders. If the company is a limited liability company, the shareholders’ liability, should the company fail, is limited to the amount, if any, remaining unpaid on the shares held by them. A company is a separate legal entity and, therefore, is separate and distinct from those who run it. Only the company can be sued for its obligations and can sue to enforce its rights.
Ireland is an English Speaking Jurisdiction, the only one in the Eurozone since the United Kingdom left post Brexit.
Ireland offers free access to over 500 Million consumers in Europe.
Ireland is ranked in the top 10 easiest places in the world to do business.
There are generous Research & Development tax credits and this is a major consideration for companies heavily involved in R&D and a major consideration to answer the question; why form a company in Ireland?
A Company is a legal entity in itself. It is completely separate from the Officers and the people who run it. It is the company that legal action is taken against as a result of unpaid debts for example.
A limited company has greater ability to raise finance by the issue of shares.
The limited company name is protected. If a company registers a name on the Companies Registrations Office, then another person cannot register the name and in many cases a similar name.
The company is protected against sudden changes to Management structure.
Employees can acquire shares in the company.
Making changes to the company is relatively simple. The reduction in bureaucracy in managing companies means that changing a Director, or adding a shareholder is relatively straight forward.

Taxation:

Directors pay income tax and the company pays corporation tax on company profits, and with current rates of tax company profits earned and retained in the business are assessed to corporation tax at lower rates than if income tax were payable on equivalent profits earned by an unincorporated business. When asking why form a company in Ireland, this is a major reason.

Scope for greater company pension scheme to be secured through a limited company

Personal tax advantages can accrue for directors of a limited company

Corporation Tax Comparison Chart

LOCATION Corporation Tax % 2022

Ireland 12.5

Lithuania 15

Romania 16

Hong Kong SAR 16.5

Singapore 17

Slovenia 19

Switzerland 14.93

Poland 19

Croatia 18

Finland 20

Iceland 20

Jersey 20

Russia 20

Turkey 23

United Kingdom 19

Portugal 21

Slovakia 21

Sweden 20.6

Denmark 22

Austria 25

Netherlands 25.8

Uruguay 25

Greece 22

Canada 26.5

Norway 22

New Zealand 28

South Africa 28

Spain 25

Luxembourg 24.94

Germany 30

Australia 30

Italy 24

Japan 30.62

France 25

Belgium 25

United States 21

United Arab Emirates 9

Information Correct on 05th September 2022

Maximising the tax benefits of a limited company

One of the main focus for small businesses will be the maximising benefits to minimise tax. This can be done by:

Ensuring that your company makes pension contributions (if cash flow allows)
Claim the maximum possible expenses allowable under legislation
Capital equipment used in your business is purchased and capital allowances claimed
Ensuring that benefits in kind (insurance, health care etc.) are paid out of the company