Since the UK’s withdrawal from the European Union at the beginning of 2020, most known as Brexit, most UK entrepreneurs have been searching for new ways and opportunities for setting up their companies. If the business you were doing or are planning to do is based on clients or partners from the EU, choosing a UK limited company is unfortunately not the best choice anymore. Therefore, many UK residents, among other people, have been starting to look toward Ireland. Most of us have probably heard that Ireland, as a wealthy, open, and export-driven country, attracts a lot of business. But after Brexit, it has become even more popular to set up a company in Ireland, especially for UK residents.

In this article we will look in more detail at why you should start a business in Ireland as a UK resident, what are the differences between a UK and an Irish company and how to start a company in Ireland.

Reasons why UK residents should set up a company in Ireland:

Both Ireland and the UK are cost-effective locations to start a company and the available company types are relatively similar. But in the light of Brexit, Ireland is becoming more and more popular as a new business hub. It is wealthy, digitally developed, has a favourable tax system, and much more.

But let’s have a look at some facts about why it’s perfect for UK residents:

Setting up a company from the distance

Entrepreneurs from the EU and the UK can start their companies in Ireland without needing any visas! Moreover, it is possible to do everything from a distance! That’s probably the reason why there are over 230 000 international companies and their employees in Ireland.

The overall rule is that if at least one of the directors is a resident in a Member State of the EEA, there are no additional requirements. But non-EEA residents can also start their companies in Ireland fully online – they just need a bond. The bond is basically insurance that will help the Irish government to balance any potential risks – it secures against certain breaches of the Companies Acts and Taxes Acts. Many companies who offer services to Irish companies also offer bond service because it has to be in place before the company can be set up. 

Convenient access to the EU market

Ireland has become a haven for UK residents and UK companies who still need convenient access to the EU market. Doing business in the EU with a UK company got quite complicated after Brexit and trade with Europe became increasingly costly. This is the reason why so many UK entrepreneurs are now choosing Ireland to be their base. A quarter of UK companies that decided to leave the UK after Brexit right away, relocated their businesses to Ireland making it the biggest beneficiary of Brexit relocations. Now, this number is even bigger.

Doing business with an Irish company makes it easier to find partners, clients, and suppliers than it would be with a UK company – dealing under the same laws in the same currency makes owning an Irish company an advantage over the entrepreneurs who only have their UK company.

Growth in economy

Ireland is one of the countries that have experienced the highest growth in the economy. The country has a great ecosystem with a very high level of support and facilities by the government. Some facts that support this claim:

• GDP is higher in the UK but the GDP growth has been remarkably higher in Ireland – 5 years average GDP growth in the UK was 2,1%, and in Ireland, it was 10,5%. Also, GDP per capita is 90% higher in Ireland.
• According to the study provided by the World Bank, Ireland ranks as the 10th world’s best economy for starting a business, compared with the UK, which is situated in the 16th position.
• Foreign direct investment net inflows in the UK are $35,1 billion, in Ireland $64,5 billion
• The corporate tax rate in Ireland is 12,5%, and in the UK it’s 20%.

Welcoming to small and starting companies

Ireland has a beneficial rule for small and starting entrepreneurs that if the company invoices below 38 000 euros, there is no need to declare the VAT. Not having the VAT number at the beginning helps to save money on accounting and enables you to register the VAT only when the business has already taken off. 

The state fees of starting a limited company in the UK and Ireland are quite similar (the state fee for a UK limited company is 12£, in Ireland the state fee is 50€), but the recurring costs for accounting can be much more reasonable for Irish companies.

Similar values

Ireland and the United Kingdom share their history as the Kingdom of Great Britain and the Kingdom of Ireland existed as one unified state between 1801 and 1922. Therefore, some of the values, manners, and beliefs are closely intertwined. Similar nature, beautiful countryside, enjoyable pub culture, education system, weather, and much more. 

So, if any UK resident is looking for a place to relocate their business, or why not even their whole life, it can’t get much easier than Ireland. 

An English-speaking country with the same time zone

Ireland is an English-speaking country which makes it perfect for UK residents. There’s no need to worry about using translation services for understanding and submitting official documents or translating every single e-mail that arrives from different financial institutions. This is a great bonus and makes administration a lot easier for UK residents!

Another good thing is Ireland’s time zone. It’s the same as the UK time zone, making it convenient for UK-based entrepreneurs, but it is also very convenient for every other country in Europe.

Youngest population in Europe

Ireland is known for its young population – the youngest in Europe. The population of Ireland is 4.8 million and half of them are under the age of 35. Also, half of the 25-34-year-olds have a higher education. This makes finding suitable employees for your new company perfect – there are lots of highly educated, active and talented people.

Another advantage in finding a talented workforce in Ireland, is that self-employed people do not have to pay a separate fee to work under other companies. It makes it easier for Irish companies to find reasonably priced professionals to offer their services without having to actually employ anyone and pay salary taxes.

Differences between setting up a company in Ireland vs the UK

Taxes

The corporate tax rate for Irish companies is 12.5%.

In the UK the corporate tax rate is 20%.

Both countries also offer many good tax incentives depending on the field of business – for example in the R&D field the incentives are remarkable. But Ireland is famous for its tax breaks, such as a tax of only 6,25% on revenue associated with patented products or intellectual property.

Both countries also have double taxation treaties that will help you avoid double taxation where the same income is taxed in two countries. Both Ireland and the UK have established agreements with a large number of countries regarding corporation tax, capital gains tax, and income tax.

Directors

Both the UK and Ireland protect the interests of shareholders and directors. Limited company means in both countries that the company is seen as a separate entity and directors are not liable for the company’s debts or obligations.

The legal age to be a director of an Irish limited company is 18 and for a UK limited company, this age is 16.

Anyone over 16 years old can set up a company in the UK but to set up a company in Ireland, you need to have at least one director who lives in the European Economic Area (EEA). If none of the directors are from EEA, you need to purchase a separate insurance bond.

It’s also worth noting that Irish companies need to have a Company Secretary appointed. If your Irish company only has one Director, you need a separate Company Secretary (which is usually outsourced from specific service providers). In the UK, you don’t need to have a separate company secretary, but you can appoint one to take some of the director’s responsibilities.

Company address

Companies in Ireland and the UK have many similarities and one of them is a requirement of a registered office in the jurisdiction. If you do not own an office, it is reasonable to use a registered address from a licensed service provider to give a more professional look for your company and to keep your own home address private. Regardless, in the UK it is allowed to use a Post Office (PO) box as your company’s address, while in Ireland it is not allowed and you need an official business address. Fortunately, many companies offer this service as a part of company registration packages and you don’t need to worry about searching for a separate office space.

Ultimate beneficial owner

In both Ireland and the UK, it is mandatory to register information about a person who has the ultimate control over the company. But these persons are named differently – in Ireland, it is called Ultimate Beneficial Owner (UBO) and in the UK it is called People with Significant Control (PSC). 

Process of setting up a company

In both countries, the company formation procedure is very simple and can be done from a distance. The set-up costs are similar, but the managing costs can be much more favourable in Ireland as the accounting costs are more affordable and small and starting companies don’t have to register the VAT number, therefore don’t need regular accounting right away.

How to Start a Company in Ireland as a UK resident?

As already mentioned, starting a company in Ireland is possible fully from distance, meaning you won’t even have to leave your house to get the business started. But as the UK is not a part of EU or EEA any more, it is necessary for UK residents to also set up a bond while starting an Irish company.

When setting up a company as a UK resident you will need:

• Registered local address – mandatory for every Irish company. The registered address will be shown in the Companies Registration Office (CRO) and all the official letters will be sent to this address.
• Secretary service – company secretary has to co-sign the annual return, maintain registers, and ensure that all the filings are made in the CRO.
• Bond – an insurance over a period of 2 years that must be put in place at the incorporation stage. The Bond acts like an insurance policy to cover the government for unpaid taxes or fines if the company leaves the jurisdiction.
• Tax registrations – usually corporate tax. 
• Annual report – mandatory for every company registered in Ireland. If a company has monthly transactions, invoices, and VAT numbers, it’s also mandatory to submit monthly declarations.

Moving and operating within a new country often means it is reasonable to dissolve your existing business in the UK and register it in Ireland under the same name. But fortunately there is a double taxation treaty between Ireland and the UK, so if you decide to keep both of the companies you don’t have to worry about double taxation. So, you can keep your UK company for doing business inside the UK and open an Irish company for doing business with the EU market. Of course, if you feel that dissolving the UK company is a better option, we can help with that as well – check the price here.

Starting a company can be a difficult process, but there are service providers who are constantly trying to come out with online and more convenient processes. With 1Office, the company registration process is super simple and you can do everything in one place – just follow these easy steps:

1. Go to Company Registration Page
2. Check if the company name you want to use is available.
3. Select a monthly package that suits your company’s needs.
4. Register an account in my1Office (a special platform that will become a home for your new business – it will assemble together all the business services and information you need), verify the account, and fill in your contact details.
5. Select that you want to establish a company in Ireland, fill in the application with the company’s information and pay the fee.
6. Print out the application, sign it, and upload it back to my1Office. Your application will move to the Companies Registration Office.
7. Congratulations! Your company will be officially ready in 5 business days.

In conclusion

If you are looking for options to move your business activities out of the UK, Ireland should be on top of your list. Hopefully, this article helped you to figure out if Ireland is suitable for your business or not. If you decide to start business activities in Ireland we are more than happy to help you, so don’t hesitate to contact us!