A Guide on How to Start Your Business in Ireland
Company Bureau Formations
04 September, 2020
Starting a business is exciting, but it can be an intimidating process without the proper knowledge and experience. Many people try to execute the entire company formation process on their own and find it very overwhelming and time-consuming. In this article, we provide you with a series of steps to follow when you are ready to start a business in Ireland.
Why open a Business in Ireland?
Ireland is a European leader for its business-friendly policies, promoting foreign direct investment and top-class financial services sector. After Brexit, Ireland will be the only mainly English-speaking nation in the European Union. Additionally, the corporate tax rate of 12.5% makes Ireland an ideal choice for international businesses that are looking to enter the European market.
With the assistance of a company formation and compliance specialist, entrepreneurs and businesspeople can set up a new Irish business and a corporate bank account in a hassle-free manner. Company Bureau is a Trust and Company Service Provider (TSCP) authorized by the Department of Justice. Based in Dublin for more than 23 years, they are a leading Irish agency that has helped many businesses get started in Ireland. Their long-standing relationship with the Companies Registration Office allows them to incorporate new companies for their clients in just a few business days. New business owners can also benefit from their prominent connections with Ireland's leading high-street banks as well as some of the biggest financial institutions across Europe.
Steps to Start a Business in Ireland
Form a Business Plan
This is not a requirement of the company set up process, however, having a business plan is recommended when starting a new venture. This document allows business owners to layout the operations of the business and should identify a need in the market and key reason the business exists. The plan should clearly explain the Unique Selling Proposition (USP); this is the unique benefit exhibited by the service, product or brand which enables it to stand out from competitors. Effective Business plans should also cover short-term, mid-term and long-term goals and projections.
This comprehensive document will establish the business objectives, helping the owners and staff to focus on the business's mission. This document can be used to show the bank and potential business partners that this is a serious venture. Having a business plan should enhance your chances of closing deals, contracts, and investment.
Irish companies are required to have a company constitution, formerly known as the Memorandum and Articles of Association. A company constitution is a formal document that sets out the rules which govern the new formation. It is important because it defines the relationship between the shareholders, director(s), and other officers of the firm. The Companies Registration Office (CRO) will not incorporate a new company without a comprehensive constitution. We encourage you to seek professional assistance to draft your constitution. This is no 'one-size-fits-all' and some of the clauses will be specific to the company types and the business objectives.
Specify a Business Address, and Registered Office Address
When incorporating an Irish business, you will need to have a registered office address as well as a trading address within the Republic of Ireland. The Registered Office Address is considered to be the legal and official address of the firm. This cannot be a PO box, it must be a physical address such as an office, warehouse, retail space or even a house. We highly suggest using an address where the mail is checked regularly because the Companies Registration Office will send all important business notices to this address.
If you have not yet secured a business location within the State or wish to operate the business from abroad, you can use a Registered Office Address service. Company formation agents typically allow their clients to use their business address as their registered office for an annual fee. Business owners may use this service temporarily, until business premises are secured or if long-term if the business is being operated from aboard... When choosing a business address, consider the location, available logistics, internet speed, the available workforce, etc. These are important decisions to make when setting up the business.
Choose a business structure
Ireland is a business-friendly country with few restrictions to foreign investors looking to set up a business. The following company structures are the most used for both resident and non-resident company formations.
Private Limited Company (LTD): This is the most popular option in most countries because the directors and shareholders are protected by limited liability. In Ireland, this model is officially known as a Private Company Limited by Shares (LTD).
Public Limited Company (PLC): This is the appropriate choice for businesses that want to trade on a stock exchange, offering the shares to the public.
Company Limited by Guarantee (CLG): This type is best suited to non-for-profits such as charitable organizations, societies, and sports or social clubs. There is no share capital or shareholders, instead there are members. No dividends are paid out and all profits are reinvesting into the business.
Have a minimum of one Director
In Ireland, all companies should have a minimum of one director who is a tax resident within a European Economic Area country. A director must be a person who is at least 18 years old, a corporate body cannot be a director. Please note: CLG companies are required to have 2 directors.
Choose a Company Secretary
Irish companies have specific compliance requirements that the company secretary is responsible for. If there is only one director in your firm, then you would need to appoint a separate Company Secretary. In cases, where there are multiple directors, any one of them can also act as the Secretary. You also have the option to assign a corporate body such as a company formation agent to act as the secretary. Using a business secretary and compliance service can be extremely beneficial to ensuring the annual filing requirements are met.
Company Shareholder(s) and Members
LTD and PLC companies must have at least one shareholder. Shareholders have ownership of the business, based on the number of shares they hold. Dividends can be paid out to shareholders periodically. It is common for the company directors to also be shareholders. CLG companies do not have shareholders, instead they must appoint at least one member (directors can also be members).
Decide on the number of shares you wish to issue
At least one share must be issued when a business is incorporated, we recommend issuing 100 shares to start. Additional shares can be assigned later when investors and/or partners are brought in. There are various types of share classes, but upon formation it is recommended to assign normal shares. Some companies choose to set an authorised share capital, this is the maximum number of shares the company can assign throughout its lifetime. There is also an uncapped option which is more commonly used. A value for each share will also need to be set, for start-ups this is typically one Euro per share.
File with the Companies Registration Office
Once all of this information has been decided you will need to register the company with the Companies Registration Office (CRO). If any items are missing or incomplete the application will be rejected, therefore it is recommended to always use a company formation agent to manage the process and ensure all requirements are met. Once the formation process is completed, the CRO will issue a Certificate of Incorporation.
Get a company seal
Irish company law mandates that all registered businesses must hold an official company seal. This is an essential tool used to officiate documents and contracts, including all statutory and legal matters associated with the business.
Opening a Corporate Bank Account in Ireland
Once your company has been incorporated, the next step is to open a business bank account. Ireland is one of the few countries that allow residents as well as non-residents to open bank accounts.
The banks will want to see the company's Certificate of Incorporation and due diligence documentations such as proof of identity for each director, PPS numbers, and proof of address. The bank will also want to see that the company has an economic link to Ireland. This could be in the form of a contract with Irish businesses (or clients), an office space rental agreement, or other documents which to show the business has intent to trade within the state.
Setting up a business in Ireland can be a cumbersome process to take on alone. You may attempt to meet requirements laid out in this article on your own. However, to ensure a hassle-free execution of your business it is best to seek expert advice. The company formation specialists at Company Bureau can assist you to with a quick and well-organized set up of your Irish company. Their standard company formation service includes Certificate of Incorporation, two bound copies of the Company Constitution, Members Certificate/s, Minutes of Directors First Meeting, and a Company Seal.
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