There is little doubt that carefully considering your company’s expansion and existing and/or future locations can make a dramatic difference to your corporate success with it being no coincidence that countries such as the UK, Ireland, the Netherlands, Hong Kong and Singapore are frequently an intrinsic part of the tax planning structure of many multi-national companies.
An Example of how Ireland can help you Expand Your Business
The Republic of Ireland is by far the most successful European country when it comes to attracting inward investment even when compared to the United Kingdom. The reasons are numerous but undoubtedly its success in negotiating itself out of one of the biggest property ‘bubbles’ ever known have if anything shown the inherent robustness of the Irish economy and solidarity between its people and government. Unlike Cyprus, Greece, Portugal or Spain there was never any question of Ireland sacrificing its economic model, which is based on low corporate taxes and a pro-business, low bureaucracy platform. At the time of writing, property prices are quickly recovering, unemployment decreasing and exports rapidly expanding.
The companies already located and in many cases headquartered in Ireland include Amazon, Apple, Dell, Google, Facebook and HP but it should also be noted that many Irish technical companies have also reversed investment back primarily into the United States and particularly in Silicon Valley in California. So what has made Ireland such an attractive location for the multi-nationals and perhaps also for your own business?
- Ireland enjoys a universal low corporate tax rate of only 12.5% for trading companies;
- Ireland has been an EU member since 1973;
- The Euro is the national currency;
- As with the US and UK, it uses the Common Law system and is deemed very business friendly;
- The accountancy system is the same as that used in the US and UK;
- Non-domiciled but ordinarily resident individuals are only taxed on their remitted income to Ireland making it a very favourable location for high net worth individuals whilst employee working in Ireland but for businesses located abroad may also enjoy favourable tax treatment;
- Irish companies can use Irish or non-Irish banks for their companies but most generally use either the Bank of Ireland or Allied Irish Bank;
- The general population is highly educated and according to the Programme for International Student Assessment (PISA) has a better educated population than that of the United States, the United Kingdom, France, Italy or Israel and is just behind Germany and the Netherlands.
- The country also has two of the World’s top 100 universities both located in Dublin, namely Trinity College Dublin (normally in the top 25 ranking) and University College Dublin;
- English is the primary language;
- The infrastructure in and around Dublin is highly developed;
- Ireland like the US has always been a constitutional Republic and has never had extreme or fascist governments since it declared independence in 1916 from the UK;
- The economy is one of the most open in the World;
- According to the London based Economist Intelligence Unit’s quality-of-life index Ireland is ranking first in the World for quality of life considerably ahead of the United States at 13 and the United Kingdom at 29;
- Ireland has no withholding taxes on the distribution of dividends;
- Ireland has an excellent and generally very favourable double taxation treaty network;
- Ireland is politically neutral and has a good reputation in the developing world especially as its foreign aid contributions are not tied to purchasing Irish goods and/or military systems
Moving or Setting Up a Business in Ireland - What is Necessary?
Although there are low corporate tax competitors within the EU such as Cyprus and Malta neither of the latter have the same prestige as Ireland and certainly not the same clean cut image. However, as with everything in life there is a reason and in Ireland’s case it is essential that genuine management and control takes place in Ireland and can be properly substantiated, something which of course the SCF Group can provide from its own Irish offices. In the case of applying for a VAT number, it is again vital that a genuine Irish presence can be shown and further that in general the business can reasonably be expected to benefit the Irish economy including positive VAT contributions. In the case of the ownership structure, it is generally recommended that an Irish trading company is owned not directly by its ultimate beneficial owner but through a conduit EU holding company such as a Cypriot, Gibraltar or Maltese holding company. The reason is that whilst in general there are no withholding taxes on the distribution of dividends this is not an automatic right unless guaranteed per the EU Parent Subsidiary Directive 90/435, which would be the case using any of the above-mentioned companies. In addition, such a structure prevents direct and immediate distribution of profits to individual beneficial owners, which in many cases could create a very negative and counter- productive tax position.
Irish Corporate Accountancy Requirements
Irish accountancy requirements are very similar to those in the United Kingdom and in fact the Institute of Chartered Accountants is actually fused allowing members of the Irish Institute work in the UK and vice versa. However, in general the Irish Revenue Commissioners are generally stricter than HMRC in the UK both in respect to more physical visits to check the veracity of any given company whilst VAT submissions are more frequent and the Irish Company Registration Office has more onerous submission requirements combined with higher fines for none compliance.