There’s Immense Profitability When Forming a Business in Ireland
Forming a business in Ireland is almost similar to any other country. However, there are significant differences, especially in tax rates. Depending on the nature of your business, here are the rates you’ll get:
- If you’re trading or selling your products or services, you’ll receive a 12.5% corporation tax. This is applicable to trade or ‘active’ income only.
- The government sets a 25% corporation tax for non-trading or passive profit like renting properties or investing money.
- The 6.25% corporate tax is for income that falls under trademarks, patents, or anything related to research and development.
Either way, you gain benefit from being taxed low by the government. In comparison to other countries, Ireland competes strongly that even its highest possible tax is still lower than other nations.
The thought of jumping into a new chapter of your life is exciting and sometimes nerve-wracking. When you decide to start up a company for the first time, everything seems confusing and overwhelming. However, once you’ve followed the steps we’re about to discuss, you can pave your way to success without doubt nor fear.
Choosing a Legal Structure
In Ireland, there are two predominant types of business structures. These are the sole proprietorship and the limited company. While other types like partnerships and LLCs are also existing, the first two are commonly applied by owners due to its benefits.
Here are some of the key differences you need to consider:
Sole Proprietorship
This structure is the most basic among all company types. Many individuals have been forming a business in Ireland using this format because it’s very simple and it doesn’t cost that much. If you savor the idea of being your own boss, then sole proprietorship will definitely appeal to you.
Since you’re the sole owner, manager, and employee of your business, it’s natural that you’re going to bear its responsibilities as well. You have to be diligent on keeping your records and accounts, as well as filing and paying taxes. However, the government doesn’t necessarily mandate you to file annual returns with the Registration Office.
In addition to shouldering the burden alone, you are also accountable for all debts and losses incurred by your company. These can affect your personal assets, in case of claims from other parties. Taxes are also heftier at 55%.
If you think these tradeoffs don’t deter you, then form your business this way. Meanwhile, you can shift to a limited company if you’re aiming for bigger goals.
Limited Company
As stated earlier, limited companies get an all-time low 12.5% tax rate – one of the lowest in the world. While you divide the profits among your shareholders, the gains would be potentially higher. This is due to collective effort, which enables you to achieve more lucrative opportunities without hassle.
Also, there’s a higher chance of establishing credibility compared to a sole proprietorship. Clients would prefer businesses with multiple members since it’s way more organized and approachable.
When it comes to liabilities, limited companies have lesser things to worry, Contrary to a sole proprietorship, a limited company shareholder’s liability can’t touch his personal assets.
The main drawback of this model is that it’s more complicated in terms of the incorporation process. It requires more time, effort, patience, and money when forming a business in Ireland using this structure. Once you’ve surpassed these trials though, you’ll certainly position your business in the nation’s map.
Naming Your Brand
It’s very crucial to conceptualize a brand name for your business. For one, it has to represent the mission and vision statement of your company in the best possible way. Once you’ve chosen a name, you can’t change it often; otherwise, your customers will question your credibility.
When naming your business, check with the CRO if it has been taken already. You’d want the name to be as unique as possible, yet not in the way that it’s hard to pronounce or remember. As much as possible, you want your brand to be more recognizable and memorable. Take note that names that are lewd and offensive are unacceptable under the government’s standards.
Next, create a website and secure a domain name for your business. Even if you’ve chosen a unique company name already, there’s still a probability that other businesses have taken your domain name already. Check with the Irish Domain Registry to confirm this.
Seeking Legal Assistance
Before jumping into your venture, you need to hire a proficient legal expert to help you along the way. Forming a business in Ireland will involve several jargons and technicalities which may confuse or overwhelm you. This applies to foreigners the most, but even Irish locals can greatly benefit from a professional attorney as well.
You’d want your lawyer to know more about the country and its laws. Scrutinize his or her background before working with him or her.
As an optional step, you can hire intellectual property lawyers as well. You can do this if you have original works that need patenting or copyrighting. It’s bad news when somebody stole your idea, or you’ve mistakenly used another person or company’s trademarked item.
Register Your Business
For sole proprietors, you can register with the Revenue Commissioners for tax and PRSI purposes. You can do this in one day. On the other hand, limited companies can apply for incorporation with the CRO. This will take 4-5 days.
Once you’ve received the certificate of incorporation, you can now open a bank account. However, the government may require businesses to secure specific licenses before the actual operation. For example, food industries need to get a sanitary permit to ensure the cleanliness of their establishment.
Expand Your Opportunities by Forming a Business in Ireland
Many people have this misconception that European countries are too affluent, lavish, or expensive to settle into. However, that’s not totally the case in some countries. In fact, Ireland is a very great nation to start a business with due to its tolerable tax rates.
As usual, the process might be too daunting. But nothing great has been achieved by taking the easy path. Of course, lottery winners are an exception. Well, establishing a business is not a game and most importantly, not a gamble. You don’t want to risk your finances to pure chance, do you?
If the idea of hard work suits you, then by all means, choose Ireland as your business destination. The nation will reward your determination with wondrous offers and amazing people. Breathtaking sights, rich culture, and scrumptious food are awesome bonuses to boot as well.
