Incorporation of a company in Ireland
What are the main types of companies in Ireland?In Ireland there are 4 different types of companies:
- Ltd or Private Limited Company
- Plc or Public Limited Company
- LLP or Limited Liability Partnership
- Unlimited Company
Larger companies prefer, instead, to incorporate a Plc (Public Limited Company), which requires a minimum initial share capital of €50,000. A company type comparable to an Italian S.p.A., a Plc only requires one director, who may also be non-resident in Ireland. With regard to shareholders, again, they may be both individuals and other companies.
A LLP or Limited Liability Partnership is a limited liability company, whose holdings consist of shares and the incorporation requires at least two partners. The incorporation of an LLP takes place by means of a private agreement, which shall not be published on the companies’ register.
Another distinctive feature of this company type is its taxation for transparency; in particular, the income produced by the company shall be taxed directly to the partners and not to the company. The income of an LLP, if it consists of two partners who are not fiscally resident in Ireland, shall be thus taxed in the country of residence of the partners themselves, not in Ireland.
Finally, an Unlimited Company is a company type that is similar to an Italian società in nome collettivo, and is characterised by the fact that its members are liable for corporate obligations directly and indefinitely with their own personal assets. Similarly to an LLP, also an Unlimited Company is subjected to the taxation for transparency regime.
How long does it take to incorporate a company in Ireland?
It takes much less than what it takes in Italy and in other countries: on average it takes 24 to 48 hours to incorporate a company.
Is it necessary to have a minimum share capital to incorporate a company in Ireland?
In relation to an Ltd or an LLP, it is sufficient to pay a minimum capital of €1, while for a Plc the minimum capital is €50,000.
It is necessary to travel to Ireland to the incorporate the company?
No, that is not required. All procedures of incorporation of a company in Ireland (VAT number and bank account opening, incorporation) may be followed remotely by our firm. Another important aspect is that no notary public is required, whether in Ireland or in Italy.
Is it required to be a resident there to incorporate a company in Ireland?
No, both the members and the director may reside in another Country
Is it possible to protect the identity of the members?
Yes, this may be done by establishing a trust and appointing a nominee shareholder.
A trust consists of the permanent transfer by the client of their shares to a trustee, who shall be responsible for their management in the interest of one or more beneficiaries. If the beneficiary is the settlor of the trust, the trust shall be a self-declared trust.
When one resorts to a nominee appointment, instead, the client shall legally remain the owner of the shares, while the nominee shall become the holder of the shares on behalf of the client. The appointment of the nominee company may be terminated at any time.
Is it possible to appoint a nominee director?
Yes, if the director of a company wishes to protect their identity. Our firm is able to provide directors residing in Ireland.
The client may terminate at any time the nominee director appointment and may also maintain access to and the management of the bank account. Is there a role comparable to that of a sole auditor or a board of auditors?
No, Irish law does not envisage either. However, an audit is compulsory upon passing certain thresholds.
Documents and information necessary for incorporating a company in Ireland
Members and directors shall provide:
- a copy of their ID or company registration certificate in the event that the member is another company;
- residence certificate or other evidence to indicate the personal address of each of them (bank statement, internet or telephone contract, etc.).
- personal data of members and directors (forename, surname, date and place of birth, residential address);
- initial capital;
- number of shares to be issued and relevant allocation to shareholders;
- name of the company;
- description of the type of activities to be undertaken.
Of course, there are no restrictions in this sense. Depending on the client’s own needs, it may be possible also to open a bank account from outside Ireland.
Annual return of an Irish company: what does it entail?
The annual return is an updated list of the members that the directors shall mandatorily file each year with the Irish [companies’] register. In the event of share transfers it is however possible, at the request of one of the members, to file, before the deadline for the mandatory deposit, an updated annual return. The annual return is not to be confused with the financial statements.
Failure to file the annual return and the financial statements: what are the consequences?
In the event of failure to file the annual return, the company shall be removed from the companies’ register. The cancellation may be revoked, but only after the filing of the outstanding documents through a restoration process.
Can I confer to an Irish company a real estate asset located in Italy?
Yes, this operation may be performed by increasing the capital of the company.
One of the advantages of this procedure is that, unlike what is the case in Italy, no sworn expert statement is required: the value of the real estate asset shall be in fact determined by the director. The transfer of the real estate asset shall be registered by act of a notary public in Italy.
The conferral of a real estate asset to an Irish company enjoys a considerable tax advantage with regard to the registration tax, which is in a set amount and not in proportion to the value of the asset, as it is instead the case in Italy.
May I establish a branch in Italy?
Of course. To this end it shall be necessary to draft a resolution to establish a branch, which shall have to be filed with a notary public in Italy together with the articles of association and the articles of incorporation of the company.
The branch shall have a representative duly recorded with the Italian companies’ register. The annual financial statements shall comply with Irish law, but shall be filed also with the Italian companies' register.
Our firm is able to assist clients in all phases of opening of a branch.
May a company established in Ireland operate exclusively in Italy?
Of course. In this case the company shall remain subject to Irish law, while from a fiscal standpoint it might be subjected to taxation in Italy.
Social security contributions: must directors and members of an Irish company pay them?
If they are not residing in Ireland, then directors and members shall not be required to pay any social security contributions in Italy.
How to sell shares of an Irish company?
To sell shares it is sufficient to fill out a stock transfer form and file it with the Irish companies’ register, without the need to involve a notary public.
Why is it advantageous to incorporate a company in Ireland?
- Time required for the incorporation, dissolution and amendment very rapid compared to Italian law;
- It is not necessary to specify in detail the corporate object;
- possibility of appointing nominee shareholders and directors;
- possibility of conferring shares to a trust;
- possibility of transferring a real estate asset from Italy without a sworn expert statement and registration tax in a set amount.
- access to the Irish market,
Yes, there is an agreement, which entered into force on 30 December 1990, between the Italian Government and Ireland against double taxation (Italian Law 5 November 1990, No 329).
Shall a company incorporated in Ireland be always taxed in accordance with Irish law?
To determine where to pay the relevant income tax, it is necessary to establish at the outset where the fiscal residence of the company is located. If a company with registered office in Ireland owned by Italian members is actually managed from Italy, then it shall be subjected to Italian taxation and shall pay the Italian IRES tax in Italy for income realised anywhere in the world.
If, instead, the company is managed in Ireland, then the taxation shall be the one required under Irish law, while in Italy it shall only pay taxes on income realised in Italy through its permanent establishment.
Where shall a company incorporated in Ireland pay its VAT?
If the company's tax residence is in Italy, then the company shall pay the VAT as an Italian company. If, instead, the tax residence is in Ireland, then the company shall pay the VAT in Ireland.
May Italian tax authorities object to the use of an Irish company?
If the company operates in full compliance with the law, there is no reason why the Italian tax authorities should challenge the incorporation of a company in Ireland.
It is compulsory to hire employees?
No, there is no obligation in this sense. Any decision to hire is at the discretion of the company.
For further information about incorporating a company in Ireland please call us on + 39 02 36 63 86 10