Considerations for incorporating a company in Ireland

Ireland has become one of Europe’s locations of choice for setting up a company. Over the past five decades, many of the world’s most successful companies have set up operations in Ireland. If you are contemplating setting up a company in Ireland, the following should be considered:

Type of company

The type of company needed is based on the purpose of the establishment of the company. Some of the main company types in Ireland are as follows:

Private Company Limited by shares (LTD)

This company type is the most frequently used in Ireland, which would be used for commercial trading. It should be noted that a LTD company cannot carry out the activities of an insurance undertaking or a financial institution under this company type. Unlike other company types, a LTD company is required to have a minimum of one director under the Companies Act 2014 (the “Act”) and must appoint a separate individual (person or corporate body) as the company secretary. A LTD company is not required to state its objects in the constitution, in this regard it is flexible in its activities.

Designated Activity Company (DAC)

In accordance with the Act, a DAC must have two directors and a company secretary (person or a corporate body). The director can also be named as the company secretary. The constitution of a DAC is comprised of a Memorandum and Articles of Association. The constitution of a DAC must contain an objects clause which can restrict the company’s activities.

Public Limited Company (PLC)

A PLC would be considered if seeking a listing on a stock exchange. PLCs are required to have at least two directors and a company secretary. The constitution of a PLC must contain an objects clause and is comprised of a Memorandum and Articles of Association. A PLC is required to have a minimum authorised share capital of €25,000. A feature of a PLC is that it can be incorporated with a minimum of one shareholder and, unlike other company types, there is no maximum limit on shareholders.

Company Name

The Companies Registration Office (CRO) may refuse a name if it is the same as or similar to an existing company name on the register or if the proposed name is offensive or if the name insinuates state sponsorship. Some words may require approval from a relevant body, for example, the word ‘Bank’ may only be used if approval is sought from the Central Bank of Ireland. Every company name shall end with its legal ending unless exempt from doing so.

Registered Office

The Act states that every company incorporated in Ireland must have a registered office and address in the state where the activities of the company are proposed to be carried out.

Company Share Capital

Every company type, with the exception of a LTD, is required to have an authorised share capital. There is no restriction on the limit or the currency of the authorised share capital of a company.

Company Officers

As mentioned above, all company types, with the exception of a LTD, are required to have at least two directors and a company secretary. The company secretary may be a corporate body or an individual. Individuals consenting to act as directors must be over the age of 18 and cannot be a person disqualified from acting as a director or be an undischarged bankrupt. There is a residency requirement that at least one director is resident in the European Economic Area (EEA). Alternatively, a bond can be put in place, or an application to the Irish Revenue proving that the company has a real and continuous link with Ireland can be submitted, or an EEA resident director can be nominated through a corporate service provider.

Tax Residency

A company incorporated in Ireland will automatically be considered tax resident in Ireland and should be registered for Irish taxes. This will not apply if the company is considered tax resident in another country under a double taxation agreement. It is important for a company looking to maintain their Irish tax residency that the company is managed and controlled in Ireland, including board meetings being held from Ireland.

When the above points have been considered, the executed statutory form A1 needs to be delivered to the Companies Registration Office in Ireland, together with an executed copy of the company’s constitution.

Contact Ronan Donohoe, Head of Company Secretarial for further information regarding the setting up of a company in Ireland, company law and/or corporate governance.