Due to its low corporate tax rate, business-friendly government, use of the English language, and its common law heritage, Ireland has become a favored destination for foreign companies entering the EU marketplace, especially those from the United States.
Foreign investors are represented across numerous economic sectors, in particular manufacturing, information and communication, insurance services, and other financial services.
Companies in Ireland are formed under the Companies Act 2014. This replaced the Companies Acts 1963-2013 and introduced substantial changes to Irish company law, including the simplification of private limited company rules.
Irish legislation provides for several types of companies, including the following:
- Limited Company: A company owned by its shareholders. Shareholders’ liability, should the company fail, is limited to the amount, if any, remaining unpaid on the shares held by them.
- Single Member Company: A company which is incorporated with one member (although it must have at least two directors and a secretary)
- Unlimited Company: an unlimited company has no limit placed on the liability of the members.
- Undertakings for Collective Investment in Transferable Securities (UCITS): A public limited company formed under EU regulations and the Companies Act 2014. The sole object of a UCITS is the collective investment in transferable securities of capital raised from the public that operates on the principle of risk-spreading.
- European Economic Interest Groupings (EEIG): A mechanism through which business within the EU can engage in cross-border commerce. The purpose of an EEIG is to facilitate or develop the economic activities of its members.
- SocietasEuropaea (SE): A SocietasEuropaea or SE is a European public limited liability company formed under EU Regulation. It is a form of association between companies or other legal bodies, firms or individuals from different EU countries who need to operate together across national frontiers. It carries out particular tasks for its member-owners and is quite separate from its owners’ businesses. Its aim is to facilitate or develop the economic activities of its members.
Limited companies are further sub-divided into the following types:
- Private company limited by shares or by guarantee.
- Designated Activity Company (DAC). Unlike a private limited company, a DAC has a memorandum of association stating the objects for which the company was formed. A DAC can be limited by shares or by guarantee.
- Public limited company.
The most common from of business entity in Ireland however is the private company limited by shares. And these have the following characteristics under the Companies Act 2014:
- A private limited company must have one director who must be resident in the EU/EEA. However, where a director is not resident in the EU/EEA, a Non-Resident Director Bond can be put in place.
- A private limited company must have one company secretary, who can be a natural or legal person.
- The minimum share capital of a private limited company is EUR100.
- A private limited company can be formed with just one shareholder; the maximum number of shareholders permitted is 149.All shareholders may be resident overseas.
- All private limited companies must have a registered office. The registered office can be in a different place to the company’s trading address, but it must be in Ireland and it can’t be a PO Box number.
- Private limited companies are required to submit an annual return. The first return must be submitted within six months of the company’s incorporation.
- A private limited company cannot be an insurance undertaking or a credit institution.
A private limited company does not need to hold an AGM as long as all the members entitled to attend and vote at the meeting sign a written resolution.
To incorporate a private limited company an eight-page form (Form A1) must be submitted to Companies Registration Office together with the company’s Constitution. The constitution is a single document and consists of the company’s articles of association. A limited company does not require a memorandum of association.
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