The country of Ireland is one of the most famous islands located in the North Atlantic. It is one of the popular offshore jurisdictions that has grabbed the attention of business investors at a global level. The geographical placement of the country, along with the low corporate tax rate, turns out to be the key drivers that attract the investors.
Now, before understanding the concept of company formation, specifically for an Offshore Company, it is essential to have a clear idea about what precisely an Offshore Company is by definition. By the end of this article, you will have a clear picture of the possible steps required to incorporate an offshore company in Ireland.
Offshore Company: The Meaning
An Offshore company is a corporate legal entity with a firmly established parent company in another country or jurisdiction and chooses to operate in another tax-haven jurisdiction.
They do not require physical offices for running their operations. Therefore, as per generic company laws, offshore companies are, most of the time, exempt from certain forms of taxes.
It is also essential to understand the mechanism of an offshore company, which will help you to get a complete idea of the process that gets followed.
[Read more: How Does an Offshore Company Work?]
Offshore Company Formation in Ireland
The Irish Company incorporation follows the effective legal regulations as of June 2015. The Ireland Company Registry takes care of the company incorporation procedure. When it comes to offshore company establishment, multiple structures can be incorporated to carry out the private, commercial, business trading, and respective holding activities.
[Read more: 5 Reasons Why You Must Invest in Ireland]
How to Setup Offshore Company as per Irish Company Laws?
The following information is specified concerning the Republic of Ireland, a part of the European Union. The majority of by-laws do not remain constant for Northern Ireland as that part of Ireland is a member of the United Kingdom.
The companies that wish to establish in the Republic of Ireland must adhere to the Companies Registration Office, and Companies act 2014.
1.Choosing the Company Incorporation Type
Depending on the kind of company one wishes to establish, they must decide the inner Irish jurisdiction where they would like to start the Offshore Company.
The incorporation details must include the partners they are functioning with inside Ireland, the nations they plan to trade with (must consist of member states of EU as well), the parent company (sponsor) details.
The incorporation process also involves submitting certain documents to the Companies Registration Office Ireland.
2.Company Naming Process
Certain words cannot be included in company names irrespective of the company type as these words are considered as statutory and, in some cases misleading towards the eyes of the law. A few examples of such terms would be – casino, co-operative, and municipal.
These terms include statutory wordings, misleading phrases, and terminologies that can only be used by legal state authorities. In addition to statutory restrictions, the applicant must also apply a suffix towards the company name such as – Limited or Ltd., Incorporated or Inc., and so on.
Hence, it is best suggested to take the primary name tag of the company name and attach a suffix to simplify the process.
Post the company’s name has been registered; the applicant must apply for a NACE code before complete incorporation.
The NACE code is a code that represents company activities and is a mandate as per the Companies Act 2014, which is used by the Companies Registration Office and the government to keep track of the incorporated company's activities and status ever since establishment in the Irish Market.
The details of the Offshore Company’s director or directors must be submitted in an orderly fashion in the following manner
- Full Name of the Director
- Nationality and residential Address
- Date of Birth
- Occupation and Business Activities
- Portfolio of Companies that the candidate is a director
If the nominated director is not a member of the European Economic Area, then he/she is not considered as Resident Director. Therefore the applicant must apply for Section 137 Non-Resident Director’s Bond that will remove the obligation of Resident Director.
Any company planning to establish its business in Ireland must appoint a company secretary to ensure that the company is following the statutory obligations set up by the CRO and must report back the same. The company secretary can be a director as well or a business entity appointed by the incorporated company.
[Read more: Ease of Doing Business in Ireland]
Business investors looking forward to investing in Ireland holds the flexibility to open an offshore bank account to carry out the business transactions smoothly.
Getting involved in offshore banking helps the investors and business owners to invest in the global market, deal with forex trading, etc.
[For more details on the benefits that you can derive, read: Advantages of Offshore Banking]
Now, while setting up an offshore company in Ireland, multiple legal considerations need to be met accordingly, and are highlighted below:
- Post-establishment, the company must submit an annual return for the previous year's operations and must contain supporting documents such as books of accounts to the Registrar of Companies.
The failure to do so will result in substantial penalty fees as well as the loss of the audit exemption for two years. The first Annual Return is due six months after incorporation (no accounts required)
- Most companies must conduct an Annual General Meeting after 18 months of incorporation, but in the case of Offshore Companies, this becomes an exception due to lack of tangible office in the jurisdiction
- When a company’s turnover exceeds Euro 8.8 million, then, in this case, they must prepare and file audited accounts
- Corporation Tax Return must be made per annum
- VAT Returns must be made every two months post VAT Registration in Ireland
The absence of a European Economic Area Director-Resident Director spikes the necessity to apply for 'Section 137 Non-Resident Directors Bond’ to be put in place
The market in Ireland follows a free flow system wherein there is no particular season for doing business among the popular offshore jurisdictions. Market fluctuations take place solely based on company decisions to make significant changes such as – high discount sales, new product launches, and customer meetups, and so on.
The result of which favors company formation at all times throughout the year with no chronological restrictions.
The above article provides the necessary administrative intellect required for an individual or a business entity who wishes to Set Up An Offshore Company in Ireland.
However, it becomes difficult for a business investor to proceed alone in a foreign land. The establishment of an offshore company has to deal with multiple legal proceedings that need to be carried out in an error-free way.
The best and effective way to proceed ahead is to have a word with a certified business consultant who can guide you in all possible ways.
Being a global business entity, we realize the gruesome process that innovative minds must create their businesses. Therefore, let us simplify the struggle for you.
Contact us to know more on the process of business set up in Ireland and let us assist you with our comprehensive network of global contacts.
How many offshore companies are there in Ireland?
1500 offshore companies.
What is the renewal process for offshore companies in Ireland?
About 12 weeks before the expiration date, the Irish government will send you a renewal invitation and a unique code. You must finish the renewal application using this code.
Do international businesses pay taxes in Ireland?
Only the trade earnings of an Irish branch or agency and some Irish-source revenue are liable to Irish income tax (usually by withholding) for non-resident corporations.