Have you been 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 set up their companies in Ireland.

This will give you some insight into begin your journey of starting a business.

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 from our clients.

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 in a business plan in the beginning. Start by mapping out your product, it’s competitive advantage and the values of the business. Truly understanding these parts of your business will help you focus and stay open minded about the direction of your business. When you’re a Startup, certain aspects, such as your target market or niche, may change as you start to operate and work with clients or investors.

Harvard Business Review says the “sweet spot for writing a plan was around the time when the entrepreneur was actually talking to customers, getting their product ready for market, and thinking through their promotional and marketing activities.” Spending too much time on a business plan may delay you actually starting your business.

What’s the difference between a Startup and Small Medium Enterprise (SME)?

Startups tend to focus on entering new markets with a disruptive product or service. Their aim is to drive revenue at a fast pace, even if that means sacrificing their cash stability the beginning. Innovation, testing, research and development is at the forefront of a Startup’s business. On the other hand, an SME usually tries to establish their place in an existing market and focus on making revenue from the start. As an entrepreneur, it’s good understand these differences because it will help you distinguish your place in the Irish economy.

According to CRIF Vision-net, an average of 55 new companies were formed everyday in the first nine months of 2019. This is a competitive landscape so before you start a business in Ireland, consider how you’ll enter the market.

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 then incorporate into a Limited Company, or they have set up as a Limited Company straight away. Some entrepreneurs start a business with a full-time job and they work on their business on the side.

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.

For example, everything a Sole Trader earns (after expenses) is called “drawings”. Sole Traders don’t take a wage as everything they earn is considered to be their profit. However, they still need to pay Income Tax, USC and PRSI on that income.

In Ireland, there are different tax rates depending on how much you earn. So if you earn a high amount, (i.e. above the higher income threshold), you will need to pay the higher rate of tax. 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 these Sole Traders should start to think about incorporating into a company.

Directors of companies have more options to take money out of the company. Such as pay themselves a salary, take dividends and contribute to a pension. These options on how to pay yourself is attractive for Sole Traders who are growing and need to plan for the future of their business.

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 your future plans for the business 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 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.

Speak to an accountant about Start Up Relief for Entrepreneurs (SURE), Employment Investment Incentive and Startup Capital Incentives.

Understanding tax liability is a main reason why entrepreneurs hire accountants. Startups 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 always happy 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 a very important step in 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.

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. This applies to all businesses, even those that aren’t trading or making any profit yet. 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.

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 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 as 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. We can help you set up your company and help you get your bank application documents together.

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 on your business 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.

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.

Talk to one of our Client Services Team to determine if you qualify for 12.5% Corporation Tax before starting a business in Ireland.

How do I hire staff and set up payroll?

You need to register as an employer with Revenue before you hire any staff. You can register yourself 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.

If you’re starting out in business, you may not need to register as an employer if you don’t plan on hiring straight away. Contact our Client Services Team who will talk you through the steps of setting up a business.

What do I do now?

The next 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 owner/Director before you invoice clients. It’s an exciting time for you so we understand the importance of understanding every aspect of business ownership before you commit to starting a business in Ireland.

We host a dedicated Startup Webinar for entrepreneurs who want to start a business in Ireland. It’s hosted by our Client Services Team and one of our Chartered Accountants.

Register for our free, live webinar now if you need help understanding a particular aspect of setting up in Ireland.

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