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Ask the Experts: Sinead Doherty

Irish Business Startup Expert

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Sinead BA, ACCA, QFA is both a qualified accountant and qualified financial advisor. Sinead specialises in helping individuals and companies start up Irish businesses.

Sinead has worked within the small business sector for several years helping small business owners to navigate their way easily through Irish tax, accountancy and company law issues.

www.fenero.ie

00353 18 85 17 35

1. Dear Ms. Doherty, I am from India and started an IT business in back 2008. I want to expand my business in Europe, in Ireland for example, and wants your expert advise on that. I want that I can advertise in Europe and can target the potential customers out there. So, please help me in this regard. Thanks, Sanjeev Question from Sanjeev Goel on 07/11/2011

   Sinead says:

   Hi Sanjeev,
   
   Thanks for your message. We assist a large number of people who wish to establish a business presence in Ireland so it will be no trouble to help you.
   
   Have you given much thought to how you wish to target your potential customers? Would you like to set up an Irish company for this purpose? We can assist with all aspects of setting up and running an Irish company. We can also offer expert advice on maximising the tax advantages available to you in choosing this business model.
   
   I look forward to hearing from you.
   
   Kind regards,
   
   Sinead Doherty FCCA QFA
   sinead@fenero.ie
   www.fenero.ie

2. Good day Sinead, We are a retail jeweller that are currently registered and trade in the UK. We are looking to expand and open a branch in Dublin but are having difficulty opening a bank account in Ireland. The banks are insisting that we have to be an Irish company. As mentioned we are already registered in the UK both as a company and for VAT and fear that if we were to register in Ireland we would be liable to pay double corp. / income tax (In Ireland & UK). We would prefer to keep our company a UK company. Could you please supply us with the pros and cons in this regard and what would be the best possible solution. Question from Chantal Matthews on 12/08/2010

   Sinead says:

   Hi Stirlings,
   
   If you wished to open a shop in Dublin you would be required to register this as a branch of your UK business with the Irish Companies Registration Office (within 30 days of establishment in Ireland) and register with the Irish Revenue to pay Irish taxes on any profits derived from this branch of your business. Therefore, even if you do not set up an Irish limited company, you will still be obliged to pay Irish taxes on the profits derived from your Dublin shop. You would however receive a credit in the UK for corporation tax paid in Ireland.
   
   Another, and perhaps better, option is to set up an Irish limited company as a subsidiary of your existing UK company. The Irish company would be taxable in Ireland. Your expected profitability will be the most important factor in determining whether a subsidiary structure would be optimal.
   
   If you expect that the shop in Dublin would not be profitable in the first one to two years, you may be better to operate in Dublin via a branch. This is because your losses would be allowable against your UK profits. This is more beneficial to you as UK corporation tax rates are higher than Irish corporation tax rates.
   
   If however, you expect that the Dublin shop will be profitable from the outset, then it would be better to set up an Irish limited company as a subsidiary of the UK company. This is because the profits would be taxed at Irish corporation tax rates rather than UK corporation tax rates which will create a tax saving for you.
   
   If you set up a new Irish limited company, it should be entitled to avail of the three year 0% corporation tax rate for new start up companies. After the three year period, the corporation tax rate reverts back to the usual 12.5% rate, which continues to be considerably lower than current UK corporation tax rates.
   
   Due to the difference in tax rates between Ireland and the UK, trade losses incurred in the subsidiary company may not be fully transferrable into the UK company which is why a branch structure would be more beneficial if you expect to make losses initially. Any losses incurred in a subsidiary may however be carried forward indefinitely for utilisation against future trading profits from the same trade.
   
   It is also possible to set up an Irish limited company which is independent of the UK company (i.e. not a subsidiary) but you would lose some benefits such as a more flexible transfer of assets and potential future losses etc.
   
   I hope the above is helpful to you.
   
   Please do not hesitate to contact us directly should you require further information. We would be happy to discuss your business plans and available options in further detail.
   
   Kind regards
   
   Sinead Doherty
   sinead@fenero.ie
   www.fenero.ie
   

3. Hi Sinead We are looking to start trading in Ireland. How easy is it to set up an Irish company? Is there any government/regional assistance available for foreign investment? Kind regards, Clare Question from clare breakwaith on 03/02/2010

   Sinead says:

   Hi Clare,
   
   Thanks for your enquiry. In relation to your two questions:
   
   1. HOW EASY IS IT TO SET UP AN IRISH COMPANY?
   
   With the help of the right advisors, it is a very quick, easy and relatively low cost process to set up a company in Ireland. Fenero for example provides an express company formation service which can set up a company in 3-5 days for a cost of only ?205 plus VAT at 21%.
   
   After 3-5 days you will have your Certificate of Incorporation which will allow you to register the company with the tax authorities and to set up an Irish bank account. Fenero can provide assistance with both of these which can be particularly useful for our non-Irish resident clients who may not be able to come to Ireland during the early stages. Fenero?s comprehensive hands-on start up service means that everything can be set up and ready to go very quickly, and with minimal inconvenience to our clients.
   
   Irish company law has recently changed to remove the requirement for there to be a minimum of one Irish resident director appointed to every company set up in Ireland. The requirement is now simply that there is only a minimum of one EEA resident director. This easing of company law restrictions makes it easier and quicker again to form a company in Ireland. However, it is important to be aware of the serious tax implications which may result by not appointing an Irish resident director. Again Fenero can provide you with all the information required in relation to this.
   
   There are no restrictions on the residency or nationality of the company shareholders.
   
   2. WHAT ASSISTANCE IS AVAILABLE FOR FOREIGN INVESTMENT INTO IRELAND?
   
   A range of services and incentives, including funding and grants, are available to those considering foreign direct investment in Ireland. Irish State organisations, such as the IDA Ireland and Enterprise Ireland, provide invaluable advice and assistance to companies/individuals from all over the world who wish to set up business in Ireland.
   
   Some of these services available are as follows:
   ? Provide funding and grants; for example:
   
   Capital Grants
   o The cost of acquiring fixed assets can be substantially subsidised by capital grants. The categories of fixed assets eligible for assistance are site and buildings purchase/development, and new plant and equipment.
   
   Employment Grants
   o These are available to companies whose presence will create employment within Ireland. The amount of grant paid is linked to the amount of each full-time and permanent job created. Other factors depend on the location of the project and the activities to be undertaken. Employment Grants are the most common form of grant aid.
   
   Training Grants and Research and Development Capability (R&D) Grants
   o This is becoming an increasingly important area for the Irish Government and as a result are offering more and more grants.
   
   ? Provide information and statistics on key business sectors and locations within Ireland.
   
   ? Introduce potential investors to local industry in Ireland, government, service providers and research institutions.
   
   Fenero Tax & Accountants work alongside organisations such as IDA Ireland and Enterprise Ireland to provide a wide range of tax, legal, and accounting services to inward investors in all sectors and from all countries.