The Republic of Ireland is a full member of the European Community. It lies to the west of Great Britain from where it became independent in 1922. Ireland is an English speaking country although Irish is also an official language. It has a population of some 3.5 million of whom over 1.2 million reside in the capital, Dublin. It has a democratically elected parliamentary government.
The Republic of Ireland is a common law jurisdiction with its law being derived from the British system.
Ireland has excellent modern telecommunications systems. There are extensive flight connections to the United Kingdom, Europe and North America. The currency is the Irish Pound which forms part of the European monetary system.
Non-resident status may be granted to Irish companies which are beneficially owned by non-Irish residents, do not undertake business in Ireland and which are managed and controlled from outside Ireland i.e. have non-resident directors.
An Irish non resident company has the following characteristics:
Irish non resident companies pay no taxes in Ireland.
A minimum of one shareholder is required. Bearer shares are not permitted. A share register must be maintained at the registered office address of the company and must be available for inspection by any member of the public. Details of shareholders are filed at the Companies Registry and with the Irish tax authorities but anonymity can be preserved by the use of shareholders who are the trustees of a discretionary trust formed as part of an overall tax planning structure.
A minimum of two directors are required. Corporate directors are not permitted. Details of directors must be kept at the registered office and appear on the public file kept at the Companies Registry but anonymity can be preserved by the use of third party directors.
An annual return and audited accounts must be filed at the public registry. It should be noted that the company will be liable to be struck off the register for non compliance with these requirements and it is not possible to file the annual return for an Irish company without accompanying that return with audited accounts.
Incorporation can be achieved within approximately seven/ten working days but we do keep ready made Companies in stock for immediate purchase.
Names must end with the word “Limited”. The following words and their associated activities can not be used: Assurance, Bank, Building Society or any other words deemed sensitive or offensive.
Ireland is a well regulated jurisdiction so that, for example, those who provide investment business services or investment advice to third parties on a professional basis are required to be licensed under the Investment Intermediaries Act 1995.
As a matter of local company law the company MUST maintain a registered office address within Ireland and it is a practical, but not legal, requirement for an Irish resident company secretary to be appointed. We would generally provide these services as part of the domiciliary service fee.
An amendment to the Corporation Tax Act 1976 made by Section 58 of the Finance Act 1995 has been introduced which imposes a requirement on all Irish non-resident companies which commenced trading on or after 6th April 1995 or which are served notice by a Tax Inspector to report various matters to the Irish Revenue Commissioners including:
These requirements may have serious tax complications for both the beneficial owners of the company and/or the company itself but we believe that careful planning can ensure that no adverse tax consequences arise.
1. Ireland has an extensive network of tax treaties and many of these provide for the exchange of information. Details of the directors and of the registered shareholders already appear at the Companies Registry but will now also be registered with the Tax Department. This increases the likelihood of those details being passed to your home tax authorities. Even if no tax treaty is in place the Irish authorities tend to be compliant in meeting requests for information from overseas tax authorities. This makes it even more important to ensure that the management of an Irish company is based somewhere fiscally neutral and is an additional reason for using our professional director services.
2. Most countries have Controlled Foreign Corporation legislation and other anti-avoidance provisions which may allow them to tax the profits of the company as though those profits had been distributed to the shareholders whether they had been so distributed or not. Thus, using a similar example, if it is revealed that the Irish company has UK resident shareholders then the UK Revenue may seek to tax the shareholders as though they had received the profits of the company even if this was not the case.
In our opinion, the use of nominee shareholders would not remove the obligation to reveal the beneficial ownership as the nominee agreements make it clear that the real control of the shares rests with the beneficial owner and not with the registered nominee shareholder. To avoid this possibility we recommend that the shares are held by a discretionary trust so that the detail required to be revealed to the Irish Revenue authorities is the name and address of our licensed Trust Company rather than your own details. Please see below for more information on trusts.
Whether you decide to adopt the above suggestions and ask us to provided third party directors and/or set up a trust to hold the shares in the company, the reporting to the Irish tax authorities must be undertaken. We would suggest that you retain our services to act as “fiscal agent” for your company which would cover our fees in attending to the necessary reporting on behalf of you company. Additionally, as can be seen from the above, Irish companies must prepare audited accounts giving details of all transactions undertaken during the accounting year. These accounts must be filed promptly if penalties are not to be visited on the company. As the “Fiscal Agent” for your company we will also assist in completing and filing the necessary returns, assisting with the preparation of the accounts introducing the company to a suitable auditor as well as liaising with the company auditors and the tax department to ensure that the obligations of the company are met in full and in a timely fashion.