How to set up a company in Ireland
To set up a company, you need stakeholders (director, company secretary and shareholders), an address in Ireland, share capital, and a unique company name. Our guide will walk you through these requirements to ensure you clearly understand the process of setting up a Limited Company in Ireland.
Once you have these, you need to prepare Form A1 and a constitution and submit it to the Companies Registration Office (CRO) in Ireland. It’s worth noting that there are also associated costs with setting up a company a company, which can vary depending on the specifics of your setup.
Don’t worry if you don’t know how to prepare these; we are here to help.
Finally, there are annual accounting requirements that should be followed once your company is set up. We go through these requirements to give you a complete checklist of what you should know when setting up a Limited Company in Ireland.
What is a Limited Company?
Private Company Limited by Shares
A Limited Company (LTD) is sometimes called 'A Private Company Limited by Shares and is one of Ireland's most common types of business structure.
A Limited Company benefits from limited liability, meaning company directors/shareholders are generally only liable for the amount invested in the business.
Separate legal entity
A company is a separate legal entity, allowing them to take out loans, enter contracts, and face legal action.
Different types of companies in Ireland
- Private limited companies are the most common. They have limited liability, can have one or more owners and their shares are not publicly traded.
- Public limited companies are for larger businesses. They can offer shares to the public and have more regulations to follow.
- Companies limited by guarantee are usually nonprofit organisations. Members’ liability is limited to a specific amount, and they don’t have shares.
- Unlimited companies have no limit on liability. Members are personally responsible for the company’s debts.
- Foreign companies are those incorporated outside Ireland but have a place of business in the country.
There are also specific types like designated activity companies, investment companies, and industrial and provident societies that serve different purposes and have specific rules. Each type of company has its own registration, governance, reporting, and compliance requirements with the Companies Registration Office in Ireland.
1. Have at least one director
The first thing you need to do is to appoint a director – you need at least one.
The director is responsible for managing the company on behalf of its shareholders. Usually, in startup companies, the directors and shareholders are the same people as you focus on building the business.
All Irish companies are required to have at least one director who is a resident of an EEA/EU country. However, suppose a company in Ireland has all non-EEA resident directors in Ireland. In that case, you must obtain a non-EEA resident bond called Section 137 Bond. This requirement also applies to UK-resident directors who want to establish a company in Ireland as non-resident directors following the changes in the rules due to Brexit.
Non-EEA/EU resident directors can set up an Irish company without purchasing a bond if at least one director lives in an EEA state, like Ireland. In other words, you need to have two directors, and one of them needs to live within the EEA.
All directors must also have a Personal Public Service (PPS) Number to set up a company in Ireland. You can apply if you do not have one, although it is a long process. Alternatively, you can apply for a Verification Identity Number (VIN) through a Form VIF. A PPS number or VIN is required to set up a company in Ireland.
2. Choose a company secretary
You must find a separate company secretary if you only have one director. If you have two or more directors, one can also act as the company secretary.
The company secretary’s primary responsibility is to ensure the company meets its Annual Return Deadline. They collaborate with the accountant to guarantee the prompt filing of the financial statements.
Late filing of the Annual Return may result in fines of up to €1,200, and financial statements may need auditing for two years. To avoid missing the Annual Return deadline, our company secretarial service can provide peace of mind. The company secretary plays a crucial role in ensuring compliance with the deadline.
Delving into the benefits of a company secretary service, it becomes evident that it can be a cornerstone in maintaining the company’s legal standing, aiding in efficient documentation and fostering corporate governance.
3. Have at least one shareholder
The shareholders are the owners of your company. It is common in new businesses for the director and company secretary to be the company’s shareholders.
Suppose you are setting up a company with a co-founder. In that case, you may question shareholders’ agreements and voting rights. However, it’s good to note that these are not required when setting up a company in Ireland.
4. Decide how many shares you want to release
Think of shares as pieces of the company you can give away. Therefore, this division of shares determines the legal ownership of the company.
When setting up a Limited Liability Company in Ireland, you issue shares. After registration of the company, you have the option to allocate additional shares or transfer existing ones.
5. Have a registered office address and business address
- What is a registered address?
- The official legal address of your company. It must be a physical address located in Ireland and monitored regularly. It is common for this address to be with your accountant because important notices get sent here.
- This address is publicly available on the CRO website.
- What is a business address? Where your company’s business mail, such as invoices, are sent.
- Please note that Revenue will still need to know where exactly your business trades from for tax purposes. This is called a trading address, but it is not required to set up a company in Ireland.
6. Decide on a company name
When you think about setting up a Limited Company in Ireland, the company name is probably the first thing you think about. But be aware that the Companies Registration Office (CRO) is strict on company names.
The company name must be unique, distinguishable against other names already registered in Ireland, and follow company name guidelines.
The Registrar will conduct name checks to ensure your proposed name is unique. Suppose the name is too similar to other names on the company register. If that’s the case, the Registrar will return your application for resubmission with a different name, causing a delay in the company formation process.
It is easier and less time-consuming to outsource company registration to a company formation specialist, such as our team here at Accountant Online. Our Company Formation Ireland Service includes a company name check. You only need to provide us with your proposed company name; we will handle everything else.
Submit to the CRO
7. Prepare and sign the incorporation documents
Once you have met the above requirements, you are ready to incorporate your company. There are two options:
- Set up a company online via the Companies Online Registration Environment (CORE)
- Outsource to a company formation specialist such as Accountant Online. Outsourcing to a specialist is easy because we know the whole process and can guide each step.
It takes 5-10 days for the Companies Registration Office (CRO) to process your new company application.
While setting up a company in Ireland is a significant step, it’s also essential to understand the process of closing a limited company should the need arise. Opting for a voluntary strike-off is one of the methods to close a company in Ireland. Ensure you meet all the requirements and settle any outstanding liabilities before proceeding with this option.
Below is what you need to do once your company is registered:
8. Order your company seal
You need to purchase a company seal when your company is registered.
The company seal has the company’s name engraved on it and is used to seal certain documents. Examples include the transfers of shares and certain documents provided in the articles, company law, contract law, and property law.
9. File the beneficial owner with the Register Of Beneficial Owners (RBO)
All Irish registered companies must register their beneficial owner (anyone holding 25% or more of company shares) on the RBO website.
You have five months after incorporation to complete this registration.
The majority shareholders must have a Personal Public Service Number (PPSN) to complete the registration. Alternatively, they need to complete a form BEN2.
You can outsource the Registration Of Beneficial Ownership service to a company formation specialist like Accountant Online or complete the registration yourself.
Suppose you don’t complete the RBO registration. In that case, it is considered a criminal offence, which can result in the imposition of a fine or even conviction. It’s also good to note that many Irish banks will only let you set up a bank account once you have completed the RBO registration.
10. Register for tax
New companies in Ireland need to complete tax registration before they start trading and before you invoice your clients. Tax registration is a separate process that your accountant usually does.
Taxes for Irish companies include:
- Corporation tax – a tax on the profits of companies operating in Ireland.
- Value Added Tax (VAT) – a consumption tax applied to most goods and services in Ireland.
- Relevant Contracts Tax (RCT) – a withholding tax applied to certain construction-related activities in Ireland.
- Employers PAYE – Employers are responsible for deducting the appropriate amount of income tax, Universal Social Charge (USC), and Pay-Related Social Insurance (PRSI) from employees’ pay.
Paying tax and filing tax returns can be complicated, with strict deadlines and penalties for non-compliance. You can outsource your Annual Accounts & Corporation Tax Returns to an accountant for peace of mind.
Tax relief for new companies in Ireland
Start-up Relief for Entrepreneurs (SURE)
Eligible individuals can claim relief on their income tax liability for up to six years, subject to certain conditions. You can avail of this scheme if you’re leaving full-time or part-time employment or made redundant.
Corporation Tax Relief for Start-up Companies
New companies may qualify for relief from corporation tax in their first three years of trading. To qualify, the company must meet specific criteria, including being a new trading company, having a qualifying trade, and meeting certain employment requirements.
Employment and Investment Incentive (EII) Scheme
The EII scheme provides tax incentives to individuals who invest in qualifying companies. Investors can claim income tax relief equal to a percentage of their investment, subject to certain limits and conditions. The scheme aims to encourage investment in small and medium-sized enterprises (SMEs) by providing financial support.
Research and Development (R&D) Tax Credit
Companies engaged in qualifying research and development activities can claim a tax credit on eligible expenditure. The R&D tax credit allows companies to reduce their corporation tax liability or receive a cash refund.
The credit is available for expenditure on R&D activities conducted in Ireland or within the European Economic Area (EEA).
New companies in Ireland can claim certain expenses incurred before trading. These expenses, known as pre-trading expenses, include costs such as market research, feasibility studies, and professional fees related to setting up the business.
11. Set up a business bank account in Ireland
To open a business bank account in Ireland, one director usually needs at least one face-to-face meeting with a bank representative. Alternatively, you can set up an online bank account.
Before you set up a company bank account, you need the company documents – including the original certificate of incorporation, your company constitution, and a copy of the A1 form. In other words, you can’t set up a bank account until the company is incorporated.
12. File Annual Returns with the Companies Registration Office (CRO)
When you incorporate your company, you must file Annual Returns with the CRO, even if you are not trading.
You can check your company’s Annual Return Date using the CORE Company Search facility.
Six months after incorporation, you must file the first Annual Return, and you are not required to file any financial statements. Companies have 56 days to complete all the elements of the Annual Return, and it’s important to note that there are heavy penalties if missed.
Additionally, it’s essential to be aware of the AGM requirements and ensure they are met to maintain compliance.
13. File a Director’s income tax return (Form 11) before 31st October
Your first directors’ return is due the year following your company’s incorporation. For example, suppose your company was incorporated in January 2022. In that case, you must file your first directors’ return by the 31st of October, 2023, the year following your company’s incorporation.
You must file this return, even if the director only earns employer (PAYE) income or the company has not traded. Failing to file this return may result in penalties and fines, which can be challenging for any new business owner and affect your cash flow. Therefore, it is crucial to file this return regardless of your company’s financial situation.
14. Apply for Startup grants and funding support
Setting up a company in Ireland can be an exciting endeavour, and knowing the available funding and grants is essential. Organisations such as Enterprise Ireland, Local Enterprise Offices (LEOs), and the Microfinance Ireland Loan Scheme offer various supports. These programs aim to assist new businesses by providing funding, mentorship, and training opportunities. By leveraging these systems, aspiring entrepreneurs can confidently navigate the process and enhance their chances of success in the vibrant Irish business landscape.
Ready to set up a new Limited Company in Ireland?
If you’ve gotten this far in our checklist and you still have questions, get in touch with us. We’re here to help.
Setting up an Irish Limited Company needn’t be a difficult task. With the right support and resources, your business can be set up within a few days.
Importantly, even if you’re working full time, don’t be daunted by the process. With effective planning and time management, you can successfully be employed and self-employed at same time.
Our team of professionals is here to help you every step of the way.
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.