Ireland is one of the most popular jurisdictions for international corporations seeking to expand into the European market. This article briefly summarizes some of the main advantage and reasons of Ireland is viewed as an attractive location for company business development.

1.       Member state of the European Union

As a member state of the European Union, Ireland offers a well-developed corporate, legal and regulatory environment. Ireland is also noted as a hub of international investment and long-established commercial relationships, trade agreements and tax treaties with European Union member states and other countries around the world. Ireland is the only English speaking member state in the EU, also it has using the euro as the official currency.

2.       Double Taxation Treaties

Ireland has signed comprehensive Double Taxation Agreements (DTAs) with 74 countries. And it is continuously expanding its tax treaty and agreement network so as to reduce barriers to cross-border trade and investment.

3.       Tax Rate

The corporation tax rate on trading income is 12.5% in Ireland, which is obviously one of the main contributing factors for many investor deciding to establish operations in the Irish jurisdiction. In addition, there are a variety of additional reliefs which can significantly reduce the effective rate of tax below 12.5% and in some cases can result in an effective rate of 0%.

4.       Tax Relief

The tax relief available for a new start-up companies in Ireland, that is a reduction of your Corporation Tax (CT) for the first three years company trade. The relief can be applied to the profits from new trade and on chargeable gains made on assets used in that trade. 

5.       Capital Gains Tax Exemption

Irish limited companies are attractive as holding company locations for foreign investors, particularly where it is combined with a trading activity such as headquarter activities, treasury, or research and development. Irish tax legislation provides for an exemption from capital gains tax for Irish tax resident companies which make disposals from substantial shareholdings (at least 5%) in trading subsidiaries tax resident in an EU or tax treaty country.

6.       Dividend Withholding Tax

Irish tax legislation provides for a 20% rate of withholding tax in respect of dividends, interest, and patent royalties. An exemption from dividend withholding tax can be claimed by an Irish company in respect of dividend payments to certain types of shareholder including, Irish tax resident companies; Companies resident in the EU or tax treaty countries not under the control of Irish residents; Individuals resident in the EU or tax treaty countries; Non-resident companies ultimately controlled by residents of EU member states or tax treaty countries.

7.       Limited Liability for Irish limited Company

Establishing a limited liability company in Ireland offers just that limited liability, it is a separate legal entity existence and, therefore, is separate and distinct from those who run it. The rights of shareholders are normally clearly defined and protected. The company is the appropriate person to be sued in the event that debts are incurred by the company which remain unpaid, despite demand, instead of the member. Limited liability and should the company fail, the liability of shareholders is limited to the amount of share capital they contributed.

See also: Ireland company Registration Procedures and Fees