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Despite its relatively modest size, Ireland is a giant when it comes to international business. The country offers a hospitable atmosphere for investors and corporations, recently ranking as one of the world's least complex place to start a business by the TMF Group's Global Benchmark Complexity Index.
This makes Ireland a desirable European location for multinational investment. The country is also home to a favorable tax rate, a well-educated and skilled workforce and excellent technology infrastructure. This range of positive attributes has drawn foreign direct investment (FDI) operations from a variety of industries, including pharmaceutical, financial services, life sciences, IT and digital media.
Why entering the Irish market makes sense
Ireland offers businesses and investors numerous reasons to do business within its borders. Though the country was recently forced to grapple with economic turbulence, Ireland has rebounded nicely. The country exited the EU-IMF bailout program in December 2013, and saw growth of 1.4 percent in 2012. Ireland's economic expansion is projected to continue gathering steam in the coming years, with the nation expected to focus heavily on international trade. Ireland is exporting more goods, and FDI has sharply risen.
For businesses seeking a low-tax environment, Ireland offers much to be excited about. The nation's corporate tax rate of 12.5 percent is one of the world's lowest. The Irish government has also been insistent there are no plans to raise the rate in the near future—a strong signal to investors that their confidence is well placed.
Ireland's pro-business climate has drawn the attention of the world press. In 2013, Forbes named the country the world's "best for business." Ireland earned the distinction after being evaluated on metrics such as innovation, property rights, taxes, technology, corruption, freedom, red tape, stock market performance and investor protection. Finally, Ireland ranks first in the world with regard to skilled labor availability. The workforce is youthful, cultured and highly educated.
The challenge of doing business in Ireland
While Ireland is celebrated globally as a great country for business, there are some specific challenges business owners and investors must face.
When forming a new business, a company founder must attest on the statutory incorporation form that the firm has complied with relevant provisions of the Irish Companies Acts. It takes, on average, one week to register a new company if all documentation is submitted properly.
When starting a new firm, there are local conditions which must be satisfied. These include having one of the company directors be a resident of a member state of the European Economic Area (EEA). A director must have lived in the state for a total of 183 days or more over the last 12 months to have residency verified. Being present in the state for at least 280 days over the last 24 months will also suffice, and there are some post-incorporation exceptions a company may pursue if necessary.
Companies must also register with the Office of the Revenue Commissioners in order to pay levies such as VAT and corporation tax. Business owners must keep track of a tax schedule that requires them to file various returns at different times during the year. These taxes, which include withholding, dividend income, VAT, VAT Information Exchange System (VIES), employer tax and social security returns, must be filed with Irish Revenue.
Additionally, it takes roughly seven days to export goods and 12 days to import goods. Both imports and exports require businesses to prepare four documents, which may prove time-consuming when trading across borders.
The challenges of operating in a new country are often daunting—regulations are constantly evolving and no business landscape remains static. Without a solid grasp of the issues at hand, businesses are exposed to tax penalties, and even the prospect of civil or criminal litigation.
If you are considering entering the Irish market, it is critical to have an experienced partner with a global footprint. CT has a worldwide network of offices and partners who will make sure your local needs are met, accurately and on time.
CT can help you get set up, provide a single point of contact and provide you with customized solutions for all your needs. We know that one-size does not fit all. From incorporation to dissolution, major mergers and acquisitions, registered agent services and all the day-to-day compliance needs in between, we’ll make sure you have the right support tailored for your global needs.
We offer a full suite of international products and services for our customers, including:• Global Transactional Services• Global Managed Services• Global Business Expansion GuidesCT has helped businesses and law firms expertly manage compliance issues for 120 years. To learn more about how we can help you better manage your global compliance needs, contact a CT representative at 844-318-1457 (toll-free US).
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