Thinking about starting a business in Ireland but don’t know where to begin? We have compiled a list of all the most common questions asked by our clients before they start a business in Ireland.

Our clients have been in your shoes and we have helped them with the first stages of deciding how they should set up their business. Take a look at the most common questions we get asked.

If you would like to get in touch with us to learn more about how we can help, call +353 (0)1 905 9364 or email hello@accountantonline.ie.

Do I need to write a business plan to start a business?

Writing a business plan will help you get your business idea out on paper. But it’s easy to get carried away with writing too much.

Start by mapping out your product, it’s competitive advantage and the values of the business.

Truly understand these parts of your business to stay focus and open-minded about the direction of your business. Certain aspects, such as your target market or niche, may change as you start to operate and work with clients or investors.

Spending too much time on a business plan may delay you actually starting your business.

Is it better to be a Sole Trader or a Limited Company?

This depends on you and your business.

We’ve seen entrepreneurs start a business as a Sole Trader and never consider changing into a company. Other Sole Traders will change to a Limited Company at a later stage. Another option is to set up as a Limited Company straight away.

Some entrepreneurs start a business with a full-time job and they work on their own business on the side.

As you can see, there is a lot to consider. There are pros and cons to each structure and the decision will usually depend on your business idea and how much revenue you think you’ll make.

If you need help deciding, talk to us. We’re here to help.

Things to consider when choosing a business structure

  1. Sole Traders don’t take a wage and any money they use for personal reasons is called drawings. They need to pay Income Tax, USC and PRSI on that income, which could be up to 52%.
  2. There are different tax rates depending on how much you earn. If you earn a high amount, (i.e. above the higher income threshold), you will need to pay the higher rate of tax. For instance, Sole Traders that earn over €70,000 a year will pay up to 52% tax on their earnings. This is a high amount of tax to pay, so changing from Sole Trader to Limited Company may be the best option.
  3. Directors can pay themselves a salary, take dividends and/or contribute to a pension through the company. These options on how to pay yourself are attractive reasons for Sole Traders to change into companies.

Talking to one of our Client Services Team about starting a business in Ireland will help you decide which structure to choose. We’ll talk to you about your idea and give you information about being a Sole Trader or Limited Company.

How much does a business pay in taxes?

This depends on many aspects of your business. It can be difficult to quantify how much tax you will pay until you’ve actually carried out some business activities.

Things that affect the amount of tax you pay include business expenses, what rate of corporation tax you should pay, how much you pay yourself and more.

As well as that, there are tax-reducing initiatives to help entrepreneurs start a business in Ireland.

Understanding tax liability is one of the main reason why entrepreneurs hire accountants. Business owners are especially concerned with how much they owe to Revenue and how to be compliant.

Get in touch with our Client Services Team to get advice on how to start your business in Ireland. We’re here to help with any queries you have.

How do I register my business in Ireland?

Registering with Revenue

Sole Traders need to register as self-employed and Limited Companies register for corporation tax with Revenue. Both business structures pay their tax to Revenue but the type of tax depends on the activities.

Both business structures can register for Value Added Tax (VAT), Relevant Contracts Tax (RCT), and employers taxes, but you may not need to do this straight away.

Tax registration is an essential part of starting a business, and it can be confusing if you don’t know what taxes you need to register for. As well as that, registering for taxes means your business needs to file tax returns to Revenue each year.

Registering with the Companies Registration Office (CRO)

Sole Traders need to register with the CRO if they want to trade under a different name than their own true name.

For example, Mary O’Brien can start a business called Mary O’Brien without registering with the CRO. But if she wants to use O’Brien Consultancy as her business name, she needs to register that name with the CRO.

The CRO plays a bigger role in Limited Companies. All companies need to be registered with the CRO and any changes in any Irish company needs to be submitted to them.

In general, it takes the CRO one week to process any applications for new companies so it’s a good idea to outsource company formation to a professional.

There are certain documents you need before you can start a Limited Company in Ireland.

If you need expert advice on how to set up a business in Ireland, get in touch now and we’ll happily talk you through it.

Do all businesses need to file tax returns?

Yes, all businesses need to file tax returns, even those that aren’t trading or making any profit yet.

If you don’t know how to file tax returns, you should outsource this to a professional because failure to submit tax returns could lead to fines and penalties.

We have seen many clients get caught out because they have not filed tax returns because they have not made a profit. This means they owed money to Revenue in interest and fines even though the business wasn’t making any money.

Don’t let this happen to you. Get in touch with our Client Services Team to learn more about what you should expect from starting a business in Ireland.

Do I need an Irish business bank account?

It’s best practice to have a business bank account but it doesn’t necessarily have to be in Ireland. If you’re not a resident in Ireland, it may be difficult for you to open a bank account here. Most banks require at least one face-to-face meeting. Irish banks also require evidence or proof of an economic link to Ireland, such as employing staff in Ireland or shareholders or Directors living in Ireland.

If you want to open a bank account in your resident state (not Ireland), you may need to get your company documents apostilled first. These company documents include the certificate of incorporation, share certificates and company register.

Do I need a physical office in Ireland?

You don’t need to have an office in Ireland to start a business here. You can work from home, in a coworking space or where ever you are currently based.

For example, many of our clients start a business with a full-time job so they are working from home during their free time. In this case, a business owner may decide to outsource to an address service provider. This provides security because you don’t need to show your home address on marketing and invoices.

If you’re planning to start a Limited Company in Ireland to avail of 12.5% Corporation Tax, you should consider where the main business activities are taking place before renting office space here – take a look at our guide on how to qualify for 12.5% Corporation Tax.

How do I hire staff and set up payroll?

Both Sole Traders and Limited Companies need to register as an employer with Revenue before you hire any staff.

You can register using a tax registration form or you can outsource this responsibility to a professional.

When you hire staff, you need to have a payroll system through payroll software or directly on the Revenue website.

You may not need to register as an employer if you don’t plan on hiring straight away. However, if you are a director and you wish to pay yourself a salary, then you will need to register the company as an employer.

Where to start?

The first step in starting your business is to get your business registered.

Whether you decide to start as a Sole Trader or Limited Company, you need to start legally operating as a business before you invoice clients. It’s an exciting time for you so we understand the importance of understanding every aspect before committing to starting a business in Ireland.

Talk to our Client Services about your situation and we can recommend the best services to suit your needs. Call us on +353 (0)1 905 9364 or email hello@accountantonline.ie.

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