Ireland is a very suitable jurisdiction for companies to be based whilst acting in commercial transactions. There are a number of structures available which allow an Irish entity to be used in worldwide commercial transactions whilst minimising the exposure to Irish tax. It is relatively easy and inexpensive to form a company in Ireland and there are many advantages to having a company here, such as:

• Having a company in Ireland allows you to be part of the EU in an English-speaking country;
• Access to all the EU trade & customs agreements between Ireland and other non-EU countries;
• Access to over 73 double tax treaties;
• Cross Border VAT registration with simplified administration;
• Easy distribution of goods and services;
• EURO currency bank account;
• Low corporate tax rate of less than 12.50% after deductions;
• A large variety of tax reliefs and incentives aimed at attracting foreign companies Read more about setting up a company in Ireland. You can speak to our Ireland business expert here.

Principal Corporate Legislation

Authorised and Issued Share Capital

Classes of Shares Permitted

Where a company has a share capital, it is presumed that all shares have equal rights, but the company may in its Memorandum or Articles of Association or the Constitution create a power to issue different classes of shares, including ordinary, preference and redeemable shares.

– Ordinary Shares
– Preference Shares
– Redeemable Shares
– Bonus Shares
– Bearer Shares

Taxation

Double Taxation Agreements

Ireland has signed comprehensive Double Taxation Agreements with 74 countries. 73 agreements are in effect. The agreement with Ghana is not yet in effect. The agreements cover direct taxes which in the case of Ireland are:

• Income Tax
• Universal Social Charge
• Corporation Tax
• Capital Gains Tax

New Companies Act 2014

In addition to consolidating all existing Company Acts and statutory instruments, the new Act contains significant reforms of company law in Ireland. The first 14 parts of the Act deal with a new type of private limited company, which will be known as the LTD.

The remainder of the Act deals with all other company types including:

• Designated Activity Companies (DAC);
• Three (3) types of unlimited companies; and
• Provides that a foreign company has only one registration option when it establishes a presence in Ireland.

Reforms also include:

• Permitting the merger and division of Irish companies;
• Setting out in legislation directors’ statutory and fiduciary duties;
• A new requirement to register, on public record, persons authorised to bind a company;
• The use of a service address by directors and secretaries in lieu of their residential addresses;
• The extension of the audit exemption provisions to include group companies; and
• A validation procedure for certain types of transactions, all designed to streamline and simplify commercial transactions and reduce costs.

A transition period of eighteen (18) months will apply from when the Act takes effect in June 2015 in respect of the conversion of existing private limited companies to either an LTD or a DAC.

86% of Irish companies are private limited companies. It is anticipated that the majority will convert to an LTD, the simplified new version of limited company to which a range of reforms will apply. As its name suggests, the other form of private limited company, the Designated Activity Company, is the closest equivalent to the existing private limited company and its permitted activities will be limited by its object clause.

How will it affect Limited Companies

Requirement to convert to new company type

Private Company Limited by Shares (LTD)

Designated Activity Company (DAC)

Existing private limited companies will have to make a decision on which of the new entity types they wish to become. They can opt in and become a new private company limited by shares, opt out and become a designated activity company or do nothing and be deemed a designated activity company for the transition and a private company limited by shares thereafter.

Unlimited Companies (UCS)
Limited Companies (PLCS)
Guarantee Companies (CLGS)

Provision of EEA Director

All company types must have one secretary and a minimum of one director. One of the directors is required to be resident in a member state of the European Economic Area (EEA).

For those residing outside the EEA, there are two options. Either you can purchase a bond, which insures the company against fines for any offences under the Companies Act, this bond would need to be renewed every 2 years. The other option would be for the Irish company to appoint a non-executive or “nominee” director to the board to satisfy residency requirement.

Section 137 Non-EEA Resident Director Bond

Section 137 of The Companies Act 2014 (section 43 under the old Act) states that if an Irish Company does not have at least one company director who is resident in the European Economic Area (EEA), a Bond must be taken out. It is important to note that this requirement pertains to residency and not citizenship. A company director who holds an EEA passport but resides outside of the EEA would also require a bond.

Securing a Section 137 Non-Resident Directors Bond or ‘Revenue Bond’ exempts companies registered in the Republic of Ireland from the requirement to have a Director who is resident in the EEA (European Union plus Iceland, Norway and Liechtenstein).

A Revenue Bond ensures the company for a sum of €25,000 and its purpose is to cover the following:

• Any fine imposed on the Company in respect of offences under the Companies Act 2014 e.g. failure to file Annual Returns and Audited Accounts on time.
• A fine for failure to supply certain information to the Revenue Commissioners – mainly information required on the Form CRO 11F.
• Any penalty which the company has been held liable to pay under S1071 or S1073 of the Taxes Consolidation Act 1997.
• Any expenses incurred in recovering the fines and penalties mentioned above.

The Non-Resident Bond covers a period of 2 years and must be put in place at the incorporation stage or upon the removal of the EEA resident director of the company. The Bond acts like an insurance policy to cover the government for unpaid taxes or fines if the company leaves the jurisdiction.

Having the Bond in effect does not replace or act as a Company Director – It merely allows the company to operate without an EEA resident director in place. Following the 2-year period of the bond, the company is required to take action to either renew the bond for a further 2 years, put an EEA resident director in place, or create a real and continuous link in the state. This link exemption can be applied for with the Revenue Commissioners when a company displays significant employment and a strong physical presence in Ireland.

We can arrange the Section 137 Revenue Bond for your company. The total fee payable for the Non-Resident Directors bond is €1.957,50 (Including VAT) and covers a period of two years. Please note once the Bond is issued it is non-refundable.

For more information or to proceed with the Bond please contact us and we will e-mail you a proposal form today.

Irish Company Bank Account in Ireland for a Non-Resident