Employing in Ireland: What You Need to Know
The employment relationship in the Republic of Ireland is governed by an extensive statutory framework, ranging from common law, statutory provisions and a variety of fundamental rights enshrined in the Irish Constitution. In addition, European Community Directives and European Court of Justice decisions apply to the employment relationship.
For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Ireland.
Key Factors to Consider When Employing in Ireland
There are several key areas to be aware of within the Irish employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.
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Contracts
In Ireland there is extensive freedom of contract between employer and employee. However, employment legislation must be borne in mind. There is no specific form required for a “contract of employment” per se to be issued. However, under the Terms of Employment (Information) Acts 1994 to 2012, employers are obliged to furnish employees with a minimum statement of the main terms and conditions of their employment within two months of commencement such as:
- Place of Work;
- Duration;
- Rate and frequency of the remuneration;
- Working hours (including overtime);
- Paid Leave;
- Period of notice.
Contracts may be for a fixed or indefinite term, or for a specific purpose. Further limitations were introduced by the Protection of Employees (Fixed-Term) Work Act 2003 (which implements EC Directive 1999/70/EC).
Employee Entitlements
| Information | Explanation |
|---|---|
| Paid Public Holidays ? | There are nine public holidays in Ireland in respect of which employees are allowed, at the discretion of the employer, to one of the following:
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| Medical Leave ? | In the absence of an express term within the contract concerning a company sick pay scheme, or a term implied as a result of custom and practice, an employee is not considered entitled to receive money from the employer during any period of absence due to sickness or injury. Thus, during such periods of absence, the employee must rely wholly upon social welfare benefits. |
| Annual Leave Accrual Entitlement ? | Employees are generally entitled to a minimum of 20 days’ holiday per year. Otherwise holidays are granted on a pro-rata basis. |
| Maternity Leave in Ireland ? | The Parental Leave Acts 1998 and 2006 (as amended) give parents the right to 18 weeks of unpaid leave in respect of each child. The leave must be taken before the child is eight years old and may be taken as a continuous period, in portions or, with the agreement of the employer, by working reduced hours. Female employees, and sometimes also male employees, are entitled to take up to 40 weeks of adoptive leave. Employees may in certain cases take up to 104 weeks’ unpaid carer’s leave in order to care for an incapacitated dependant. Female employees are allowed to attend ante-natal appointments during their working hours and to take maternity leave of up to 42 weeks (more precisely 26 weeks of ordinary maternity leave and 16 weeks of additional maternity leave) provided the employer is given at least four weeks of notice of the commencement of it. An employer is not obliged to pay the employee during maternity leave, however the State provides a maternity allowance of 80 per cent of the employee’s gross earnings during the first 26 weeks of leave, subject to a maximum level determined from time to time by the Government. The employee is also entitled to take up to 16 weeks of additional maternity leave, paid entirely at her own expense. |
Employment Termination
| Information | Explanation |
|---|---|
| Termination of Employment ? | As mentioned, Under the Unfair Dismissals Acts 1977 to 2007 (the “Unfair Dismissals Acts”) an employee who has worked for more than one year for the same employer is entitled to rely on the mentioned legislation to challenge a dismissal. Dismissals can be justified on:
The following minimum statutory notice periods apply to all employees who have completed a minimum of 13 weeks of continuous service with the employer: 13 weeks – 2 years = 1 week 2 years – 5 years = 2 weeks 5 years – 10 years = 4 weeks 10 years – 15 years = 6 weeks 15 years or more = 8 weeks |
Probation
| Information | Explanation |
|---|---|
| Probation Period ? | There is no regulation in Ireland that expressly deals with probationary periods. According to contract law, a probationary period will only be effective if expressly mentioned in the contract. Although there is no statutory limit on the duration of an employee’s probation period, he or she will be covered by the Unfair Dismissals Acts 1977–2007 once 12 months’ continuous service is accrued. Accordingly, the right to be protected against unfair dismissal will be applicable once the 12-month service threshold has been reached, even if the employee is still on probation. |
Pension
| Information | Explanation |
|---|---|
| Pension Requirements ? | Private pension schemes are becoming more common with contributions made to an independent fund by both employers and employees. If a pension scheme is approved under the relevant legislation, it may benefit from various tax concessions, subject to certain limits. Employers must offer access to a Personal Retirement Savings Account (“PRSA”) to “excluded employees” (i.e. those whose employer does not operate a pension scheme or where there is a waiting period of over six months to join the scheme). Recently, the Irish Government has introduced tax legislation to encourage employees to participate in the ownership of their employer company through share award and share option schemes. There are also further tax incentives available for certain key employees in the Research & Development area as mentioned in the Payroll and Tax section. Most fringe benefits are subject to income tax as benefits in kind, such as the payment of the employee’s contributions to a private health insurance scheme (operated by VHI or other health insurance providers) for the employee and his or her dependants. |
GEO Solutions or DIY Employment in Ireland?
Companies entering Ireland must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Ireland Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have an Irish entity established that can run payroll.
A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally, Shield GEO is responsible for all compliance issues related to the employment.
Outsourcing Employment Through a GEO Employer of Record Service
Using Shield GEO Employer of Record Services in Ireland
Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Ireland. For companies, which intend to employ their staff directly through their incorporated Irish entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Ireland.
As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Ireland.
The Shield GEO solution is an attractive alternative where
– the company is looking to employ staff quickly;
– the company doesn’t have an appropriately incorporated entity in Ireland;
– the company wants to work within a defined budget;
– the company wants to limit its initial commitment in Ireland;
– the company needs help with tax, employment, immigration and payroll compliance in Ireland.
Shield GEO can contract directly with the company to employ and payroll their staff in Ireland. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits. Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.
Payroll
| Payroll | Ireland |
|---|---|
| Management Fee for Employer of Record Services / Monthly Payroll Costs | Please contact us for a quote |
| Notes | Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities. |
| Currency ? | The national currency is Euro and its current exchange rate with the USD is 1.09. |
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| Tax Returns Supplied | Yes |
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| Employers Social Security and statutory contributions |
Class A (Majority of employed persons) €38 – €352 inclusive per week = 8.5%; €352.01 – €356 per week = 8.5%; €356.01 per week or more à 10.75%; Class S (Self-employed people, including certain company directors) = N/A |
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| Employees Social Security and statutory contributions |
Class A (Majority of employed persons) €38 – €352 inclusive per week = Nil €352.01 – €356 per week = 4%; €356.01 per week or more = 4%; Class S (Self-employed people, including certain company directors) = 4% (Employee) |
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Payroll and Tax in Ireland
Although it is now possible for companies investing in research and development to avail of a new 6.25 per cent corporation tax rate under a new “knowledge development box”, Ireland made paying taxes more costly and complicated for companies by increasing landfill levies and by requiring additional financial statements to be submitted with the income tax return.
| Information | Explanation |
|---|---|
| Remote Payroll ? | A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Ireland. Under Irish law, companies registered in other countries are allowed to obtain a license to do business and have employees in Ireland. |
| Local Payroll Administration ? | In some cases, a company will register their business in Ireland under one of the forms available: sole trader, partnership and limited liability company but prefer to have another company administering its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider. |
| Internal Payroll ? | Larger companies with a commitment to Ireland may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Irish payroll, and can fulfil all tax, withholding, and payroll requirements. This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Irish employment laws. |
| Fully Outsourced Payroll & Employment ? | Companies can outsource the employment and payroll of their staff in Ireland to a GEO, like Shield GEO. This is possible for both foreign workers and Irish nationals. This is the easiest, fastest and safest way to payroll staff in Ireland. Shield GEO manages all aspects of payroll for workers in Ireland, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client. Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips. Read more about outsourced payroll and employment through Shield GEO. |
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Tax Figures
| Information | Explanation | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Corporate Income Tax ? | Equal to 12.5% on taxable profits, if the company is investing in R&D activities the rate can be reduced to 6.5%. |
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| Income Tax Rate ? |
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| Sales Tax ? | VAT: 23% |
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| Withholding Tax ? |
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| Other Tax ? |
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| Time to prepare and Pay Taxes ? | 82 hours |
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| Time required to start a Business ? | 5 days |
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Immigration and Work Permits in Ireland
Foreign workers are required to have the proper visas and work permits in Ireland, as established by immigration laws. Work permits must be secured for employees, and sponsored by a locally licensed and incorporated entity, which can be a problem for companies just entering the Irish market. If you have yet to complete the incorporation process, you can use an outsourced management company or GEO to sponsor the employee for the necessary permits.
Have Your Own Business?
When in the process of hiring EEA nationals or foreigners, employers should proceed as follows:
EEA nationals do not require employment permits to work in Ireland. Swiss nationals are also exempt from any requirement to obtain an employment permit to work in Ireland. An employment permit will generally not be granted where to do so would result in more than 50 per cent of a company’s employees being non-EEA nationals.
Special dispensation may be made where the employer is a start-up company with enterprise agency support, that are applying for critical skills, general or intra-company transfer employment permits. In such instances the requirement may be waived, by up to two years from the date the start-up registered with the Revenue Commissioners as an employer.
The Employment Permits Acts 2003–2014 apply significant penalties for employing non-EEA nationals without a valid employment permit. The maximum penalty for such an offence is a fine of up to a maximum of €250,000, up to 10 years’ imprisonment, or both. Most employment work permits will be for up to two years, however, these can be renewed, if required. There is no requirement under the relevant legislation in Ireland to keep a register of foreign workers, however, it is good practice that the employer keep a note of all work permits, in particular their expiration date, to ensure that all employees have a valid work permit in place.
Process of sponsoring worker
The first step of the sponsorship process is for the employer to obtain an employment permit from the Department of Jobs, Enterprise & Innovation (DJEI).
There are different types of employment permits issued by DJEI including Critical Skills Employment Permits and Work Permits. DJEI will shortly introduce a new range of employment permits. The correct visa type for a holder of any type of employment permit issued by DJEI is the Employment (Permits etc.).
It is possible to apply for an Employment (Permits etc.) visa up to 3 months before the date the employee will travel to Ireland. If employees are visiting another state prior to travelling to Ireland, they must have the relevant visa for that state in their passport before be considered for an Irish visa.
Employer Documentation Required
Upon completion of the online application process, it is necessary to follow the instructions on the summary application form that is created by the online system. The summary form will contain information on where employees sponsored have to submit their supporting documentation. The summary form which they must print, sign and date must be submitted with their supporting documentation.
Employees may be required to provide their biometrics information as part of the application process.
If applicants submit any false or misleading information, or false supporting documentation as part of their application, it may result in the refusal of their application without the right of appeal. It may also result in them being prevented from making further Irish visa applications for a period of 5 years.
The supporting documentation is as following:
- Two colour passport sized photographs not more than 6 months old
- A current passport and a full copy of any previous passports, that must be valid for at least 6 months afterthe intended date of departure from Ireland.
- A signed letter of application including your full contact details:
- Employment Permit from the Department of Jobs, Enterprise & Innovation
- Employment Contract (if any)
- Letter from employer in Ireland
- Evidence of qualifications and previous work experience
- Finances
- Medical/Travel Insurance
- Previous Visa Refusals
Supporting documentation
If applicants submit a document that is not in English, it must be accompanied by a full translation. Each translated document must contain:
- confirmation from the translator that it is an accurate translation of the original document;
- the date of the translation;
- the translator’s full name and signature; and
- the translator’s contact details.
All letters submitted from a business, company or other organisation should be on official headed paper and give full contact details so that they can be verified. These must include a full postal address, name of contact, position in the organisation, telephone number (landline), website, and email address (email addresses such as Yahoo or Hotmail are not accepted).
Time
Applications for Employment Permits are processed in date order. Applicants can generally expect a decision within 8 weeks from the date on which your application is lodged at the Visa Office/Embassy/Consulate.
The application may take longer if e.g. applicants have not submitted the necessary supporting documentation, their supporting documentation needs to be verified or because of their personal circumstances (e.g. if they have a criminal conviction).
It is possible to check the processing times for the Visa Office/Embassy/Consulate that is handling your application on their website.
Cost
The fees for visas are as follow:
- Single entry €60
- Multi entry €100
- Transit €25
The visa fee is an administration fee which covers the cost of processing your application. This fee cannot be refunded if the application is refused or withdrawn.
Activities not permitted with this Visa
Applicants are not permitted to take up any form of employment, other than that for which you have already been approved.
Use the Shield GEO Employer of Record Solution?
Once you get in touch with us, one of our consultants will take all the work off your hand, co-ordinate with our local partners to get all the required permits organised, provide the processing time, costs, document-checklist and keep you informed through the process. Contact us to know more.
Types of visas in Ireland
| Category | Description of Visa |
|---|---|
| Employment Visa (Atypical Working Scheme) | It is possible to apply for an employment visa (Atypical Working Scheme) upon approval from the Atypical Working Scheme Division of the Irish Naturalization and Immigration Service to take up short term employment in Ireland. It is possible to apply for the visa up to 3 months before your date of travel to Ireland. When visiting another state prior to travelling to Ireland, it is necessary to have the relevant visa for that state in your passport before applying for an Irish visa. Upon completion of the online application process, applicants must follow the instructions on the summary application form that is created by the online system. The summary form will contain information on where the applicant must submit the supporting documentation. The summary form which must be printed, sign and date must be also submitted with the supporting documentation. Applicants may be required to provide their biometric information as part of the application process. If applicants submit any false or misleading information, or false supporting documentation as part of their application, it may result in the refusal of their application without the right of appeal. It may also result in them being prevented from making further Irish visa applications for a period of 5 years. The supporting documentation is as following: • Two colour passport sized photographs not more than 6 months old; The fees for visas are: • Single entry €60 Applications are processed in date order. • undertake other paid or unpaid work, If applicants submit a document that is not in English, it must be accompanied by a full translation. Each translated document must contain: • confirmation from the translator that it is an accurate translation of the original document; |
| Long Stay Visas (Longer than 3 months) | If foreigners wish to travel to Ireland for more than 3 months, for example to pursue a course of study, for work or to settle permanently in Ireland with family members who are already resident in Ireland, then they can apply for a long stay ‘D’ visa for a single entry. Before making an application for a long stay ‘D’ visa please make sure that you are familiar with the immigration arrangements that apply to persons seeking to come to Ireland for more than 3 months, whether to study, to work or to settle permanently with family members who are already resident in Ireland. If applicants are granted a long stay ‘D’ visa and wish to remain in the State for longer than 3 months, or beyond the period of leave granted to them by an Immigration Officer at an Irish port of entry they will be required to register and obtain a residence permit. |
| Employment (Van der Elst) | It is possible to apply for this visa when applicants are: • lawfully resident in the EU Member State in which the employer is established; It is possible to apply for an Employment (Van der Elst) visa up to 3 months before the date of travel to Ireland. 2. How to apply Upon completion of the online application process, applicants must follow the instructions on the summary application form that is created by the online system. The summary form will contain information on where applicants must submit their supporting documentation. If applicants submit any false or misleading information, or false supporting documentation as part of their application, it may result in the refusal of their application without the right of appeal. It may also result in them being prevented from making further Irish visa applications for a period of 5 years. The supporting documentation is as following: • Two color passport sized photographs not more than 6 months old; 4. Fees Please refer to the table of Fees for information on the fee that you are required to pay. You may be required to pay additional charges e.g. relating to the submission of your documents. Applications are processed in date order. Processing times can vary between countries. They can also vary during high volume periods during the year. However, you can generally expect a decision within 8 weeks from the date on which your application is lodged at the Visa Office/Embassy/Consulate. Your application may take longer if e.g. you have not submitted all necessary supporting documentation, your supporting documentation needs to be verified or because of your personal circumstances (e.g. if you have a criminal conviction). If your application is being processed by the Visa Office, Irish Naturalisation and Immigration Service, Department of Justice and Equality, 13-14 Burgh Quay, Dublin you can check the date of the applications currently being processed on our Following your Application page. You are not permitted to: The documents below are important because they provide information about your personal circumstances in the country from which you are applying. If you submit a document that is not in English, it must be accompanied by a full translation. Each translated document must contain: • confirmation from the translator that it is an accurate translation of the original document, The Visa Officer considers each application on its merits and may request additional information or documentation. |
| Business Visa | It is possible to apply for this visa when working outside Ireland and willing to come to Ireland to carry out activities relating to a personal job e.g.attend meetings, attend trade shows for promotional work, arrange deals or negotiate or sign trade agreements or contracts, carry out fact finding missions. It is possible to can apply for a business visa up to 3 months before the date of travel to Ireland. If applicants are visiting another state prior to travelling to Ireland, they must have the relevant visa for that state in your passport before applying for an Irish visa. Upon completion of the online application process, applicants must follow the instructions on the summary application form that is created by the online system. The summary form will contain information on where they have to submit their supporting documentation. If applicants submit any false or misleading information, or false supporting documentation as part of their application, it may result in the refusal of their application without the right of appeal. It may also result in them being prevented from making further Irish visa applications for a period of 5 years. The supporting documentation is as following: • Two color passport sized photographs not more than 6 months old; 3. Fees The fees for visas are: Applications are processed in date order. Applicants can generally expect a decision within 8 weeks from the date on which your application is lodged at the Visa Office/Embassy/Consulate. With this visa it is not permitted to: If applicants submit a document that is not in English, it must be accompanied by a full translation. Each translated document must contain: • confirmation from the translator that it is an accurate translation of the original document; All letters submitted from a business, company or other organization should be on official headed paper and give full contact details so that they can be verified. These must include a full postal address, name of contact, position in the organization, telephone number (landline), website, and email address (email addresses such as Yahoo or Hotmail are not accepted. |
Setting up a company in Ireland
When setting up a company you may want to consider these factors:
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Business factors
- Low corporate tax rate;
- IDA requirements in ensuring the establishment or development of the operation and that the company is both commercially viable and will provide new employment;
- Intellectual Property Law – In Ireland there is no legislation protecting know-how, trade secrets and confidentiality. Furthermore, IP ownership has to be specifically established by contract. Data protection laws in Ireland, however, are stricter than in the U.S.
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The Legal Framework
The Legal Framework may be an influence. The Country, indeed, follows a common law jurisdiction, with a legal system that is broadly similar to the US and the UK systems and might differ from other systems of civil law present in Europe.
There are three main types of businesses available to foreign companies in Ireland. Each of these business forms has distinct advantages and disadvantages, as well as differing scope of activities, registration requirements and minimum capital requirements. In most cases the type of company to set up, will depend on the degree of commitment a company has to Ireland and the planned business activity.
Ireland represents an ideal access point for for doing business into the European Union. Businesses with operations in Ireland benefit from barrier-free access to the EU’s 28 member countries and its four freedoms – free movement of goods, capital, services, and people.
Limited Liability Company
The shares in a company are owned by its shareholders. If the company is a limited liability company, the shareholders’ liability, should the company fail, is limited to the amount, if any, remaining unpaid on the shares held by them. A company is a separate legal entity and, therefore, is separate and distinct from those who run it. Only the company can be sued for its obligations and can sue to enforce its rights.
There are several types of limited company:
- A Private Company Limited by Shares (LTD company)
- A Designated Activity Company (DAC) – (limited by shares)
- A Designated Activity Company Limited by Guarantee (DAC) – (limited by guarantee)
- A Company Limited by Guarantee (CLG) (limited by guarantee not having a share capital)
- A Public Limited Company (PLC)
These are the steps required to establish a Private Limited Liability Company in Ireland:
The founder swears before a Commissioner for Oaths (CfO.
A company founder (director, secretary, or solicitor) attests on the statutory incorporation form that the company has complied with all the relevant provisions of the Irish Companies Acts. Furthermore, the founder must swear before a CfO or a practicing solicitor. Moreover, the founder must declare that the company will carry on an activity in the state when the company has been incorporated.
Documentation required with the Companies Registration Office (CRO).
A founder may register a company at the Companies Registration Office (CRO) in one of the following three ways:
- The CORE registration system, in which the papers for incorporation are lodged in print and electronic form. Under this scheme, the memorandum and articles of association must be submitted in CRO preapproved format. After the documents are filed, the CORE incorporates the company within 5 working days.
- A “Fe Phrainn” system, in which (as detailed in the first method) the incorporation documents are submitted to the CRO in a preapproved format. Under this method, however, documents are submitted in print form only, and the CRO incorporates the company within 10 working days.
- An further system in which the incorporation documents are sent to the CRO in print form, but the memorandum and articles of association are not in a preapproved format. In this instance, the
CRO incorporates the company in 2–4 weeks.
To access the first two systems, the company founder must apply to the CRO for an access number and have the memorandum and articles of association approved in advance. Generally, only professional agencies adopt the expedited systems.
- Necessary documents for limited companies:
- Memorandum and articles of association.
- List of directors, secretary, and subscribers.
- Statement of nominal (authorized) and issued share capital and consideration paid.
- Notice of registered office.
- Statement of the main business activities and the address where they will be carried out, contained in a statutory notice sent to the CRO.
All forms can be downloaded from the CRO web page. For all the mentioned methods, a CRO Form A1 must be submitted with details of the company name, the first election of directors and secretary, and the subscribers to the memorandum and articles of association; the authorized and issued share capital; and the registered office and the details of the location in the state where the central administration and the main company activities are proposed to be undertaken. The memorandum and articles of association, signed by the subscriber shareholders, will also be submitted to the CRO.
From April 2006 professional incorporators do not have to reregister the preapproved memorandum and articles of association. When using the CORE system only those pages that are company specific of the pre-approved memorandum and articles of association need to be submitted with an application to incorporate a company.
As of September 2009 it is possible to reserve the proposed company name in advance of submitting the incorporation papers. The advantage of this is that it avoids the rejection of the proposed name by the Companies Registration Office either because it has already been taken or because it is inappropriate for some other reason. There is a fee charged of € 25 but this fee is then taken off the incorporation fee meaning that there is in effect no cost. A registration fee of € 100 is charged for each model memorandum and articles of association registered with the Office. However, the use of the model company incorporation documents, using the CRO disk system, will result in a reduced incorporation fee of € 50. The company registration fee for procedures other than the new ones is € 100.
Obtain a company seal
In addition to getting a company seal, the company has to keep the statutory registers for the directors and shareholders.
Register for corporation tax, social insurance (PAYE/PRSI), and VAT with the Revenue Commissioners
To register for corporation for VAT taxes and for social insurance (PAYE/PRSI) with the Revenue Commissioners, the company must file Form TR2. The Tax Identification Number is needed only when the company must pay year-end taxes. Upon entering form data into the Commissioners database, the company is immediately registered for PAYE/PRSI. However, VAT registration requires an additional 5 to 10 working days.
Processing time: Approx. 2-3 weeks.
Partnership
According to the CRO, a partnership is where a minimum of two persons conduct business with a view to making a profit. It must consist of at least two persons and there is normally a maximum of 20.
Certain financial partnerships may however have up to 50 members. It is not a separate legal entity – that is to say, a partnership has no legal personality, separate and distinct from the various partners which comprise the partnership. A partnership that adopts a name that does not consist of true names of the partners without any addition must register the name as a business name.
The Limited Partnership Act 1907 facilitates the creation of a partnership in which some members have limited liability for the debts of the firm. Their liability is limited to the extent of their contribution.
A limited partnership must consist of at least one general partner and one limited partner. The general partner(s) is/are liable for all the debts and obligations of the firm. The limited partners contribute a stated amount of capital and are not liable for the debts of the partnership beyond the amount contributed.
A limited partnership must be registered with the CRO and in accordance with the 1907 Act; otherwise the partnership is a general partnership.
To form a limited partnership, submit the following forms, together with the registration fee, to the CRO:
- Form LP1 (Application for registration of a limited partnership)
This form must be signed by both the general and limited partners. - Form LP3 (Statement of the capital contributed by the limited partners)
Statement of the capital contributed by the limited partner(s). The form must also be signed by any one of the general partners.
Processing Time: Approx. 3 weeks.
For all the forms
Fees:
- LP1 – €2.50
- LP3 – N/A
Sole Trader
It is easier to set up as a sole trader but if your business fails you are liable for any debts that the business can incur. The main legal obligation is that the entrepreneur must register as a self-employed person with the Revenue Commissioners. In particular, it is necessary to advise the local Revenue office when a source of income (other than PAYE income) commences. It is possible to do this by completing Form TR1 – Tax Registration form for Sole Traders, Trusts and Partnerships. This form is for an Individual, Sole Traders, Partnerships, Trusts and Unincorporated Bodies requiring to register for Income Tax, Employers Paye/PRSI/USC, VAT and Relevant Contracts Tax.
When registering for self-assessment with Revenue you will automatically become registered for PRSI purposes with the Department of Social Protection.
The most effective way to deal with tax affairs is through Revenue On-Line Service (ROS) available at www.revenue.ie. By accessing ROS it is possible to familiarize with its many features and register to become a ROS customer thereby enabling you to file returns and make payments electronically. (See also section on Mandatory Requirement to file Tax Returns electronically).
Also if you wish to use a business name other than your own name you must register your business name with the Companies Registration Office.
Registration of a business name is obligatory if any individual or partnership (whether composed of individuals or bodies corporate or any combination of both) or any body corporate carries on business under a name other than their own true names. Its purpose is to make public the identities of those individual(s), partnerships or corporate bodies being the legal entity behind the business name.
Specifically, registration of a business name is required if:
- an individual uses a business name which differs in any way from his/her true surname. It makes no difference whether the individuals first name or initials are added. So registration is required if, for example, Mr. John Murphy traded as Murphy Builders but not if he traded as Murphy or John Murphy);
- a firm uses a business name which differs in any way from the true names of all partners who are individuals and the corporate names of all partners which are bodies corporate;
- a company uses a business name which differs in any way from its full corporate name;
- a person having a place of business in the State carries on the business of publishing a newspaper.
Forms to be completed
To register a business name, submit one of the following forms, along with the registration fee (€40 for paper filing/€20 for electronic filing), to the CRO within one month of adopting the business name:
- Form RBN1: for an individual
- Form RBN1A: for a partnership
- Form RBN1B: for a body corporate
Processing Time: Approx. 4 weeks.
For all the forms
Fees: Forms RBN1; RBN1A; RBN1B: €40 paper /€20 electronic.
Societas Europaea (SE)
A Societas Europaea or SE is a European public limited liability company formed under EU Regulation (Council Regulation 2157/2001) and the European Communities (European Public Limited Liability Company) Regulations 2007. S.I.21/2007.
An SE can be formed by merger or as a holding or subsidiary SE or by conversion of a plc to SE. An SE must have members from different Member States unless an SE itself is setting up a subsidiary SE.
A Societas Europea as per the council regulation can be formed in 4 ways:
- First of all there can be a merger and at least two of the companies must originate in different EU countries;
- secondly a joint subsidiary can be formed and at least two of the companies must originate in different EU countries or they must have had a subsidiary or branch in another EU country for at least 2 years;
- thirdly a holding company can be created and at least two of the companies must originate in different EU countries or they must have had a subsidiary or branch in another EU country for at least 2 years;
- lastly, a public limited company formed under the national law can be converted and the company must have had a subsidiary in another EU country for at least 2 years.
Only the public limited companies belonging to the Member states can form a merger. The creation of a SE holding firm is allowed to private and public limited companies, which have their registered offices situated in any of the member states and branches or subsidiaries in any of the member states. A joint subsidiary can be formed under similar circumstances to legal entities, which are governed, by private or public law.
The minimum capital requirement is EUR 120,000.
The registration and completion of liquidation of an SE is published for information in the Official Journal of the European Union.
Fees:
- Holding – € 100
- Merger – € 100
- Subsidiary – € 100
- Conversion – € 100
Outsourcing Employment Through a GEO Employer of Record Service
Whether to incorporate in Ireland, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.
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- Ireland Employer of Record Overview
Ireland
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