Starting a new business in Ireland can be both exciting and daunting, invigorating and frustrating—often all at the same time. This can be magnified if you are starting your new venture from abroad or as a new resident in the country, and while Ireland is generally very open and amenable to new business, you will still need to follow the process and fulfil certain criteria before you get up and running.
The key to making the process as smooth and stress free as possible is research and planning. Rather than being blindsided down the road, with costly and time-consuming hurdles slowing you down, being prepared and knowing what to expect will help your business get off the ground without too many issues.
So, to get off on the right foot, read our guide on everything you need to know about starting a business in Ireland.
Starting a Business in Ireland – First Steps
Researching the fundamental requirements and responsibilities that that your business must fulfil is critical, and identifying these elements at the beginning of your journey will allow you to see the bigger picture as your business grows. Here, we look at five key elements that will allow you to build a solid foundation before you move onto your business plan and other set up requirements.
- Identify your business requirements – Your business requirements are the basic elements that your business will need to function. You should consider the best location for the business, the basic equipment requirements and costs, how many staff you will need to employ, as well as your overhead costs such as insurance, rent, website costs etc.
- Identify your investment requirements – Every business requires a degree of investment to get off the ground. Consider all start-up and running costs, identify ways to finance your business venture, research financial support and benefit from direct referral to Government agencies ,seek advice on further support from. Banks, Credit Unions, Microfinance Ireland, family support, other non-bank finance.
- Identify potential risks – Every startup and SME contains an element of risk, and ignoring these risks is a recipe for disaster. Whether it's a prolonged downturn in profit, potential supplier issues, tax or cash flow problems, you need to be prepared for when things go wrong.
- Understand the tax system – No new business wants to be on the wrong side of the taxman, and understanding the intricacies of the Irish tax system, your responsibilities to the business and its employees, how and when you will need to pay, as well those hard and fast deadline that come around each year, factoring in your tax responsibilities is key to long term success.
- Look for business support programmes – Before you start with your business plan, it's worth identifying the kind of help you can access in the form of education and funding. The Department of Enterprise, Trade and Employment is a good place to start, however, there are often support programmes in your local area that you can take advantage of.
Starting a business in Ireland: The Process
Once you’ve researched those key elements, it's time to put pen to paper and develop the formalities associated with starting a business in Ireland. Here, we look at some of the most important steps in the process that will allow you to get set up legally and transparently.
1. Write a business plan
The first thing you need to have in place is your business plan. This is the same in Ireland as it would be anywhere in the world. Without a plan, your business is simply not going to happen.
Your plan should include, at a minimum, your business pitch, a forecast for the short-, medium- and long term, and a list of your experience and expected markets, as well as prospective suppliers or contacts in Ireland. Additionally, a cash flow planner is also a great idea.
The pitch is a key part of the plan. This should outline what makes your business different from competitors, outlining your goals for your business and how you intend to achieve them. Think of it almost like a mission statement but remember that it also needs to be built around realistic expectations and verifiable evidence.
2. Choose your structure and register
Depending on how you intend to structure your company there are different bodies with whom you will need to register. If you plan on starting out as a sole trader, then you need to register with the Revenue Commissioner for tax and PRSI purposes. If you want to be a limited company, you will need to register with the Companies Registration Office (CRO). You’ll also need to decide if you want to operate as a public limited company (plc), a private limited company (Ltd) or a partnership.
If you are unclear on exactly which of these structures is suitable for your business, here is a quick breakdown of the implications of each:
- Sole trader – The simplest way to set up a small business, sole traders are entirely responsible for debts if the business fails. Personal assets can be used to pay creditors and you must register as self-employed. If you wish to use a business name you must also register with the CRO.
- Partnership – A business of two or more people with an agreement drawn up by a solicitor that dictates all parties are jointly responsible for running the business. If it fails, all partners are jointly responsible for the debt.
- Limited company - A separate legal entity that, should the company fall into debt, limits claims on assets to those of the company. Reports and accounts must be reported to the CRO each year.
When you register with CRO, you will need to outline your company bylaws, a list of directors and employees, a registered office and description of planned business activities.
The main advantage of registering as a limited company is that there is a corporate tax rate of 12.5% on profits. This is compared to personal tax rates of up to 55% for sole traders. However, registering as a sole trader is a much easier process.
3. Branding options
When you register with CRO, you will need to decide on a company name. Ideally this should be in place at the business plan stage but can be changed down the line. It is important to remember, however, that your chosen name may not be available since there is the potential for it to already be in use. A quick search using the CRO Business Search Facility will allow you to identify whether your name is available.
The name you register will need to be displayed outside every place where you conduct operations—so choose wisely! You also need to pay attention to how your name can be used in terms of branding and marketing, as well as how well it works for online domains.
4. Funding and banking
You now need to find funding for your enterprise if it is not already in place. If you have not secured funding from private sources, then it may be possible to access it from government programmes such as the Local Enterprise Office. This will depend on the nature of your business and the amount required. You can find a list of more funding options here.
You also need to set up a bank account. Both residents and non-residents can set up business accounts but there are some administrative processes for limited companies, including providing a signed mandate from each director. You will also need to provide a signed Certificate of Incorporation, signed copies of your by-laws, social security forms, proof of identity, proof of economic ties to Ireland and some additional documents.
It’s well worth choosing an online banking option. Online banking penetration in Ireland stood at 58% in 2018 and has been growing steadily. Similarly, one in three credit transfers in 2017 were initiated via digital banking. If you want to take the hassle out of online banking, as well as getting access to all the latest online banking business features including fast multi-currency payments, then explore our products on the Intergiro website.
5. Register for taxes
You do this with the Revenue Commissioners. There are three taxes you will need to register to operate as a business in Ireland including corporation tax, social insurance, and value-added tax (VAT).
You will be given a Tax Identification Number. This allows you to report taxes online and will automatically register you for Pay As You Earn (PAYE) tax, as well as Pay Related Social Insurance (PRSI) contributions.
You also need an official company seal to stamp documents and show they have been approved by the board of directors.
For more information on setting up a business in Ireland, both the Local Enterprise Office and Citizens Information office can help. Additionally, stay tuned to the Intergiro blog here for insights into the Irish market and open your online business bank account today to get your startup started right!
Setting up a Business in Ireland – FAQs
Why is Ireland a good place to set up a business?
Ireland is well-known for its favourable tax regime that prioritizes new business ventures, offering one of lowest corporation tax rates in Europe at 12.5 and a 25% tax credit against research and development costs. In addition to this, a well-educated workforce, a range of grants and competitive loans, and a generally supportive environment means Ireland is the ideal place for your new business.
Is it easy to start a business in Ireland?
In 2017/2018, more than 22,000 new businesses were set up in the country, and as you can see above, it is not an overly complicated or costly process to start a business in Ireland. If you have your business plan and funding in place, including a business bank account, then the process is relatively straightforward.
If you are a national of another EU country the process is especially easy and Ireland is generally receptive to new business from around the world. However, obtaining capital to start a business in Ireland may be more difficult than in some other EU countries, so it may be worth investigating your funding options before setting up your business.
How much does it cost to start a business in Ireland?
Registering with the Companies Registration Office and with the tax authorities will cost around €40. There are organisations who can arrange these services for a fee of around €200 if you are abroad or unable to do so in person. If you need a registered address for your business or a nominated company secretary, this will cost between €300 and €500.
In general, set up costs for a business in Ireland are less for sole traders than limited companies. The same goes for annual running costs. On average, it costs around €1,500 more per year to run a limited company due to accounting fees, payroll costs, and returns.
Other costs include paying a €25 deposit to reserve your business name, a process that takes a few days. But none of the initial costs are prohibitively expensive.
How can I get a business grant for a startup in Ireland?
Depending on the type of business you wish to set up in Ireland, there are grants and loans available to get you off the ground and support you during your first years. A good place to start is with Citizens Information or Microfinance Ireland, however, there is also support from the EU for businesses getting started in Ireland.
Can a foreigner start a business in Ireland?
Other European Economic Area (EEA) or Swiss nationals do not need permission to start a business in Ireland. Since Brexit, however, the landscape is somewhat unclear for British nationals, and while the Common Travel Area arrangement guarantees the right to work in the country, there may be other issues surrounding setting up a business in Ireland for UK citizens.