Most of us have probably heard that Ireland is a good place to start a business. It is mentioned a lot and is constantly ranking in different global reviews and surveys as one of the best places to do business. In this article we will look in more detail why to start a business in Ireland, what are the main factors affecting the Irish economy and how to start a company in Ireland without leaving your home.
Introduction to Ireland Business Environment
Ireland is a place that attracts a lot of business. It is a wealthy country and one of the most open and export-driven economies in the world. Ireland is also digitally quite developed. Of course we cannot compare it to fully digital business environments like Estonia with its unique digital nation called e-Residency. But nevertheless, Ireland is still very competitive regarding digital processes – strong household internet access (92%) and smartphone usage (90%) are great foundations of that.
Enterprise Ireland Digitalisation has even come out with a Voucher that helps companies prepare a plan for the adoption of digital tools and techniques across the business. The voucher is worth 9000 € and offers funding to hire a consultant to carry out an assessment of digital maturity and develop a digitalisation roadmap for the future.
Let’s point out some key numbers defining the business environment of Ireland:
- Ireland’s GDP was almost $437 billion in 2020.
- The unemployment rate before the Covid was a record low of 4.8 percent and now remains at 5.8 percent.
- Ireland is the 24th most competitive nation in the world out of 140 countries ranked in the Global Competitiveness Report.
- 24th place in the ease of doing business (among 190 economies) according to the World Bank annual ratings.
- The corporate tax rate is 12,5%.
Reasons why Ireland is a good place to Start a Business?
Ireland is becoming more and more popular as a new business hub. And not only for the locals but also for non-residents. But why is that?
Well, there are many reasons behind that. Let’s look at the most important ones:
Stable and outward looking environment
Ireland is one of the countries that have experienced the highest growth in economy. The numbers mentioned before are a great indication of that. But in addition, the country has a great ecosystem with a very high level of support and facilities by the government.
Ireland is a very welcoming country for startups. For example, Enterprise Ireland invests in 200 start-ups every year. And foreign investment level is really high in Ireland – foreign direct investment in 2019 exceeded the 1 trillion euros for the first time!
No wonder over 1600 innovative foreign companies are based in Ireland, including Amazon, Microsoft, Google, Facebook, Pfizer and Intel.
English-speaking country in the Eurozone
Ireland is the only country that uses the euro as currency and at the same time has English as its main language. This makes Ireland a very attractive place to conduct business. No need to worry about using translation services for registry 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 foreign entrepreneurs!
Another good thing is Ireland’s time zone. Firstly, it’s the same as the UK time zone, making it perfect for UK-based entrepreneurs. But it is also very convenient for every other country in Europe, and even the 5-hour difference between New York is quite reasonable to conduct business with US-based companies and/or customers.
A member of the EU, Eurozone, and OECD
Well, it seems quite obvious, but being a member of the EU, Eurozone, and OECD is actually a big advantage. It shows that Ireland’s economy and position in the world is stable, safe and open. Usually the most important backbone when choosing a place to establish a company, is the stability of the country. When choosing Ireland, you most definitely won’t have to worry about that.
And being a part of the Eurozone brings many benefits in terms of stability in currency and in the ease of doing business with other foreign parties.
A perfect option for non-EU residents (including UK residents) to start an EU company from distance
Now let’s move on with some great news! Entrepreneurs from the EU can start their companies in Ireland without needing any visas or additional permits! This also applies for the people from the UK, Norway, Iceland, Switzerland and Lichtenstein. Moreover, they can even do everything from distance! Possibly that’s the reason why there are over 230 000 multinational companies and their workers in Ireland.
But that’s not all. Non-EU residents can also start their companies in Ireland fully online. There are some extra conditions of course, but nothing too complicated. If at least one of the directors is a resident in a member State of the EEA, there are no additional rules. But if none of the directors are residents in a member State of the EEA, mandatory bond is needed.
The bond is basically an insurance that will help the Irish government to balance any potential risks – it secures against certain breaches of the Companies Acts and Taxes Acts. The value of the bond has to be €25,000 and it is required for the period of two years. Keep reading if you want to find out more how to get the bond set up and how much it will cost you.
And of course, Ireland has become a haven for UK residents and UK companies who still need convenient access to the EU market. Having to do business in the EU with a UK company got complicated after Brexit and it is also the reason why so many UK entrepreneurs are now choosing Ireland to be their base. A surprising fact supporting this information – a quarter of UK companies that decided to leave the UK after Brexit, have relocated right to Ireland making it the biggest beneficiary of Brexit relocations.
One of the most favourable tax systems and Double Taxation Treaty Network
Ireland has a corporate tax rate of 12,5%, which is actually one of the lowest tax rates in the world. Of course, to benefit this tax system, it’s not enough to have your company registered in Ireland, but you also have to acquire the personal tax residency in Ireland. So, if you have been thinking of moving to Ireland (or somewhere in Europe), then Ireland should definitely be on top of your list. But no worries, if you can’t manage to do that because Ireland is also constantly working to grow their Double Taxation Treaty network. They now have agreements with 72 countries in the world.
Another benefit regarding taxes – for R&D companies and startups, there are additional ways to claim back tax (R&D incentive is 25%) which makes it extra beneficial for some entrepreneurs and companies to start their activities in Ireland.
Also, a good rule for small and starting entrepreneurs is 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.
Geographic position and connectivity
Ireland has a great strategic location just between the United Kingdom, Europe and the United States. It is very well connected with all the main business hubs and countries through air and sea. It is even called the gateway to all the world markets, because its position and connectivity makes it easy for business owners to move around, for talented workforce to move around and to also easily move around your products if necessary.
The capital Dublin has also good connectivity with most of the country, so setting up an office (or a virtual office if you are not planning to physically locate to Ireland) in Dublin is definitely a safe and convenient choice.
Youngest population in Europe – lots of highly educated, active and talented workforce
Ireland is known for its young population – it is even youngest in Europe. The population of Ireland is 4.8 million and half of the Irish population is under the age of 35. And over 50% of 25-34 year olds have a higher education. Which makes the job market and finding suitable employees for your new company perfect for employers.
Another good thing about finding a talented workforce in Ireland, is that self-employed people do not have to pay a fee to offer their work. It makes it easier for entrepreneurs to find good and reasonably priced professionals to offer their services without having to actually employ anyone and pay salary taxes.
Is starting a company in Ireland suitable for foreigners?
Of course. The main reason why Ireland is a perfect place for foreigners is the option to start a company without travelling to Ireland. Everything can be done from distance and that is a massive bonus, especially during the times of Covid-19, when travelling can be limited and restrictions are in place.
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. Sounds incredible, right? And the best part is that this option is not limited to EU residents, but is also possible for non-EEA residents.
Want to set up a company? If at least one of the directors of the company is from EEA, you will need:
- Registered local address which is mandatory for every Irish company. The registered address will be shown in the Companies Registration Office and all the official letters will be sent to this address.
- Secretary service
- After the company is established you need to apply for tax registrations like corporate tax.
- Every company registered in Ireland has to submit an annual report. If a company has monthly transactions, invoices and VAT numbers, it’s also mandatory to submit regular declarations.
All these services are also offered by service providers like 1Office who help non-residents to set up and manage their companies in Ireland. Check out the prices and packages here!
If none of the directors is from EEA, you will also need a bond service – a special insurance covering €25,000 to the government if something goes wrong with your business. You can set up a bond through a local financial institution yourself or also order it through a service provider who will manage the process for you.
How to Start a Company in Ireland as a non-resident?
Starting a company can be a difficult and time-consuming process. But fortunately there are service providers who are constantly trying to come out with online and more convenient processes. With 1Office, the company registration process as a non-resident is as easy as ABC! The process is so simple that you can even do everything in one place – just follow these easy steps:
- Go to Company Registration Page
- Check if the company name you want to use is available.
- Select a monthly package that suits your company’s needs.
- 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.
- Select that you want to establish a company in Ireland and fill in the application with the company’s information.
- Print out the application, sign it, and upload it back to my1Office platform.
- Pay the fee and your application will move to the Companies Registration Office.
- Congratulations! Your company will be officially ready in 5 business day.
If you are considering opening a company in a foreign country, then Ireland should definitely be on 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!