Are you looking to take your existing company and venture into the thriving Irish market? If so, you’re in the right place. This comprehensive article explores the two primary options for expanding your business into Ireland: setting up an Irish subsidiary or establishing a branch office.
We’ll delve into the registration processes and tax and accounting requirements, helping you confidently navigate the complexities of expanding into Ireland. While it may seem daunting, remember that we’re here to guide you every step of the way.
What is the difference between a subsidiary and a branch?
A subsidiary is an independent legal entity partially or wholly owned by another company. It has the exact compliance requirements as a Limited Company in Ireland.
A branch is not a separate legal entity; instead, it is considered an extension of the parent company and operates under its legal umbrella. For accounting and financial reporting purposes, a branch’s financial statements are typically consolidated with those of the parent company. This means that the branch’s financial statements are combined with the parent company’s. Additionally, a branch performs the same business operations as the parent company. It often serves as a foreign office, conducting business on behalf of the parent company in the host country.
Setting up a subsidiary in Ireland
Registering a subsidiary is like setting up a new company in Ireland. One of the only differences is that the parent company will be the majority or sole shareholder of the new company.
When setting up a company with another company as the shareholder, you need to appoint someone authorised to sign on behalf of the company, usually a director or other authorised person.
How to set up a subsidiary
Here’s a brief checklist of the requirements to set up a subsidiary company in Ireland:
- Unique and distinct company name
- At least one director
- Company Secretary
- At least one shareholder
- Registered office address
- Business address
How long does it take to set up a subsidiary?
To set up a company in Ireland, you must complete Form A1 and Constitution and submit them to the Companies Registration Office (CRO).
Once the CRO receives your submission, they will start the registration process. The timing of this can vary, depending on the time of year, but it is usually 2-5 when you avail of a company formation service. Once you submit your documents to the CRO, they can estimate how long the process will take and provide you with regular updates.
Setting up a branch in Ireland
To register a branch in Ireland, you need legalised and authenticated copies of corporate documents from the parent company and a Form F12 or F13, depending on where your parent company is based.
These documents should then be submitted to the CRO, who will process your application.
What do you need to set up a branch?
- A notarised and apostilled copy of the parent company’s Certificate of Incorporation
- A notarised and apostilled copy of the parent company’s Memorandum and Articles of Association
- A copy of the parent company’s latest financial statements
- A completed Form F12 for EEA companies or Form F13 for non-EEA parent companies
- A registered office address in Ireland
- A person authorised to accept legal service in Ireland
How long does it take to set up a branch?
Once all the documentation is gathered and received by the Companies Registration Office (CRO), they will start the registration process.
The timing of this can vary, depending on the time of year, but the CRO can provide you with an estimated timeline based on their current processing times.
What are the different tax implications?
Both subsidiaries and branches must register and pay Corporation Tax in Ireland. We recommend you discuss with an accountant in Ireland if you need help determining your tax responsibilities.
Different rules apply depending on what your business does. It’s always best to seek professional advice.
What about accounting requirements?
A subsidiary has the exact compliance requirements as an Irish company and, therefore, needs to register for Irish taxes, file tax returns, and operate Irish payroll if they hire employees through the subsidiary.
On the other hand, branches are foreign companies and must file a Form F7 with the CRO and submit a copy of the accounts filed in the parent company’s country. Note that Form F7 should be submitted to the CRO no more than 30 days after the parent company is required to submit its financial statements.
Like subsidiaries, branches must register for Corporation Tax and file tax returns for any Irish revenue generated. The branch must register for employer’s taxes and operate payroll in Ireland if it hires employees.
Can you set up a branch or subsidiary from abroad?
You can set up a branch or a subsidiary from abroad. When registering a subsidiary, you must also ensure that at least one EEA-resident director is appointed. If not, your company must purchase a Section 137 Bond for non-EEA resident directors.
Branches must also ensure that they appoint a “person authorised to accept legal services in Ireland.” If you don’t have someone to fill this role, you can outsource the task to a Company Secretarial Service in Ireland.
How much does it cost?
This depends on several factors as each situation will be different. Below are the prices to set up the company. However, you may need to outsource some services, such as Address or Company Secretarial Services, so be sure to contact us if you need more information. You can also examine our guide on the costs of setting up a Limited Company in Ireland for more details.
| Branch | Subsidiary | |
| CRO application | Form F12/F13 – €60 | Form A1 – €100 (paper application) or €50 (electronic application) |
| Notarised and apostilled documents | Around €100 per document | N/A |
How to decide between a branch or a subsidiary?
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Legal structure and ownership
A subsidiary is a separate legal entity from the parent company, while a branch is not. Consider whether you want a distinct legal entity or if operating under the parent company's name is sufficient.
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Operational control
When deciding on the structure of your business, consider the level of control you want. A subsidiary will allow for more autonomy, while a branch may have to follow the policies and procedures of the parent company.
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Professional advice
It's essential to seek guidance from legal and financial advisors who can provide tailored advice.
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Costs and administrative burden
Consider both options' administrative and operational costs. It's worth noting that branches might entail more paperwork and compliance efforts.
Larissa is a Fellow Chartered Accountant (FCA) and is the CEO of Accountant Online, which specialises in company formation, company secretarial, annual accounting services, bookkeeping, tax, and payroll services for micro and small companies in Ireland and the UK.
