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Company formation in Ireland

Any particular horror stories to look out for?

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We are considering forming a company registered in Ireland, (Brexit related).

This will be a wholly owned subsid, with small share capital, and no particular assets.

Is the process broadly comparative to UK formations - ie can it be done online etc?

Are there any dramatic differences to watch out for?

(note for SIFT - you could do with a Brexit Tag)

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paddle steamer
By DJKL
27th Oct 2020 10:05

Sorry I cannot advise, Tom, have only visited once (my honeymoon)

This is presumably continuation of the earlier thread where you mentioned your after sales service provision into the EU. Did you determine an EU presence was the simplest way to proceed?

Did you make any progress on recognition of qualifications, presume any statutory electrical sign offs will need to be done by people with EU recognised qualifications?

( This latter is the area causing grief for my brother in law who works in the pharma industry, a string of degrees and professional qualifications but in the absence of agreement no cross border recognition so he may as well not have - at 68 can't see him bothering to now qualify in an EU country)

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By tom123
27th Oct 2020 10:23

The qualifications thing is a bit of a worry, not really sure where that will go.

It seems to be each country (EU) has it's own requirement, or not, for recognition.

For example Hungary appears to be more relaxed than France (as you might expect)

The EU presence is more for the initial certification of machinery, which is in effect made by the corporation rather than an individual.

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paddle steamer
By DJKL
27th Oct 2020 12:02

What you may end up having to do is convert qualifications- much the same way say Scottish solicitors can qualify to practice in England, the catch will likely be the language hence choosing Ireland is sensible in case this becomes necessary- imagine trying to retake exams in a language you do not know!!!!!

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By Jdopus
27th Oct 2020 10:41

It's not very comparable, unfortunately you need to get yourself into the mindset of dealing with Companies House ala 20 years ago UK time. I'll give you a few pointers based on my own experience.

When dealing with the CRO (Irish Companies Registration Office) they will require original signatures at every step along the way. They will not accept scans at any stage, so you need to plan around up to a month of processing time at the moment on any documents you submit to the Irish Revenue or CRO. You can do most online but they will always require a signature page to be lodged with them after the online forms are completed. It is possible for them to digitally sign it if they have a portal with the Irish Revenue but good luck getting a client to sign up for these as they're more difficult to set up than the UK equivalent.

As a rule of thumb the Irish tax authorities are far more bureaucratic but far less rules based. They require complex forms to be completed in order to file information, but you also can't hold them to strict turnaround times or published rules like in the UK. Instead of expecting a reply in strict time limits you can get your work dealt with quicker by trying to ring them directly and asking the people who work in their departments to reply to your letters (nicely).

You'll need an Irish address to receive mail. If you don't have one you can pay a formations company to provide registered office services. Expect to pay around €300-400ish per year including VAT. Depending on the relationship of the subsidiary you may also need an Irish resident person to act as company secretary. Formations companies can do this too but it's more expensive again, I've never had cause to price this myself.

Massive danger to watch out for: If your accounts are a day late with Companies House you pay a small fine. If your accounts are even a day late with the CRO you automatically lose audit exemption and it becomes impossible to file them unless they are approved by an auditor who gives you their registered auditor reference. I once priced what an audit would cost on a dormant company and was told the client would have to pay a minimum of £3,000 to cover the cost of the simplest audit sign-off possible. May be possible to find this cheaper but in terms of hassle and cost it is a huge potential pitfall.

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By tom123
27th Oct 2020 10:46

Thank you for that useful information - particularly about lateness.

Fortunately we are normally very early with our filings, but, even so, useful.

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By Jdopus
27th Oct 2020 10:49

No problem. If you have any other specific questions feel free to ask, I deal with them quite regularly.

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By sarahjaneuk
29th Oct 2020 11:42

Would echo this advice (inc think CH 20 years ago!).
I live in Ireland now, having formed a company here having previously had companies in the UK when I lived there.
The digital signature thing is a real pain to use, even if you do have a PPS number (which each person signing will need to have). I work in IT and find the process seriously a pain so heaven knows how others that aren't as familiar with IT use it successfully.
Saying this, once set up, filing is relatively easy and can be completed online. The CRO like the last set of annual accounts to be filed with the annual return, which is different than the UK (unless that has changed in the last 4 years since I was last a company director in the UK) when they AR and accounts could be filed at different times of the year (based on the 9 month rule).
Anyway, good luck. Hope this info helps.

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By davexyz
29th Oct 2020 10:36

One of the Directors Must be resident in the EU as per the requires detailed below for the CRO (Ireland)

"All company types must have one secretary and a minimum of two directors. One of the directors is required to be resident in a member state of the European Economic Area (EEA). The Private Limited by Shares company (LTD company - registered under Part 2 Companies Act 2014) can have one director if it chooses. (It must have a separate secretary though where the company is a single director company)"

"The UK will be in a transition period after leaving the European Union. This transition period is due to last until 31st December 2020. If thereafter there is no agreement in place, companies which have only UK resident directors will be required to comply with section 137 Companies Act 2014. This is the requirement to have an EEA-resident director)."

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By Matrix
29th Oct 2020 10:48

I would get tax advice at the outset, most of it will depend if you have people on the ground there or not. Where will the company be managed and controlled? Even if it is not tax driven there could be tax pitfalls and additional compliance costs.

I had to get a quote for Irish VAT recently and it was very expensive so I expect you will have to try and do it yourself, I am sure you are more than capable.

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By peeej
29th Oct 2020 11:04

We have been dealing with inquiries about incorporating companies in Ireland originating from the UK for some time now and as a firm operating in ROI we are familiar dealing with the Companies Registration Office and the Revenue Commissioners both for new registrations and ongoing compliance. Cannot offer a direct comparison with the UK but it is a matter of knowing the rules and procedures here and following them.

The observation about losing audit exemption is well made. There are court procedures to deal with the situation which can be less expensive than a statutory audit.

A requirement you should be aware of is that one director of the company needs to be resident in the European Economic Area (used to have to be Irish Resident). This can be avoided by putting a bond in the value of €25,395 in place. This is to cover cost of unpaid charges/penalties which might be imposed for breaches of company or tax legislation. The company secretary can be a company.

As with all such decisions it is a cost/benefit analysis for you. However, I would advise obtain support, advice and quotes from firms operating in the market - it will save you time and effort in the long run. Perhaps your own accountants could provide a referral.

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