Comparing company setup in Ireland and the UK

If you are looking to set up a business catering to clients or partners from the European region, Ireland and the UK may stand out as the prime choices. These countries, both communicate in English, exist within the same time zone, boast business-friendly governments, and uphold regulations that are comparatively lighter by European standards. Nonetheless, what sets Irish and UK company setups apart? Here are the things you need to know before conducting business in Ireland versus the UK. 

Key Documents

The process of registering a company in Ireland entails the submission of specific forms to Companies Registration Office (CRO). The key form that needs to be submitted is Form A1. This form provides details on the company name, address, directors, secretary, shareholders, share capital etc. Form A1 should be followed with the Company Constitution. This document lays out the rules for governing the company. It specifies director and shareholder rights, procedures for meetings, etc.

In the UK, registering a private limited company involves filing documents with Companies House, the government agency that stores information on all UK companies. The key documents required include the Memorandum or Articles of Association, which govern internal affairs related to directors and shareholders, and Form IN01. Form IN01 provides important information such as the company name, address, details of directors, shareholders, and share capital, etc.

Key Tax Rates

The UK corporation tax rate is currently 25% for all limited companies, whic is a shift from the previous 19% until April 2023. In compared to the UK, Ireland offers an even more competitive rate of 12.5% for trading income. This figure positions Ireland as one of the most attractive locations for setting up a headquarters.

VAT is charged on the supply of goods and services in the country. In the UK, the standard rate is 20%, while a reduced rate of 5% applies to certain essential items like residential energy, mobility aids, children’s car seats etc. Zero-rated VAT is applicable for goods like food, books, medicines, children’s clothing. In Ireland, the standard rate is 23%. A reduced 13.5% VAT rate applies to certain items like food and beverage, medical devices, oral medicines, construction services etc. Some services like education and banking are VAT exempt.

PAYE refers to the income tax and national insurance contributions deducted from employee salaries. The rates range from 20% to 40% in Ireland, while in the UK, they span from 20% to 45%, determined by set income tax bands. Employers are obligated to calculate and deduct PAYE from their employees’ wages.

EU Membership

The economic strength of London in particular had made London an ideal entry point for businesses entering Europe. Despite the whole Brexit debacle, the British economy is resisting. London remains as the financial hub of Europe, hosts nearly 60% of companies on the Fortune 500 listing. Additionally, The United Kingdom maintains a strong currency and continues to be one of the continent’s most important consumer markets.

Nevertheless, the aftermath of Brexit has heightened the significance of Ireland’s EU membership for businesses. Ireland now serves as a gateway to the entire European market of 500 million consumers. The advantage extends to tariff-free exports across the EU, making Ireland a strategic choice for businesses seeking seamless access to this vast consumer base. Moreover, Ireland also currently ranks as the easiest European country in which to start a business, with Estonia and the UK in 2nd and 3rd place respectively.

Company Officers and Shareholders

  • Director: Directors are legally responsible for running the company and making sure company accounts and reports are properly prepared. In both Ireland and the UK, registering companies require a minimum of one individual to act in the capacity of a company director. Additionally, both countries allow non-resident to be the director.
  • Shareholders: In both Ireland and the UK, a limited company must have at least one shareholder. The UK company can have an unlimited number of shareholders, whereas in Ireland, limited companies are capped at a statutory maximum of 149 shareholders.
  • Secretary:  A company secretary need to ensure a company complies with financial and legal requirements, as well as maintaining its high standards of corporate governance. UK companies do not legally need to have a secretary. On the other hand, Irish companies require an individaul or one of the directors to be the company secretary.

Registration Timelines

A private limited company can be registered with the CRO within 14 days after they receive your completed application. In the UK, Registration of a private limited company with Companies House takes just 1 working day after they receive the completed forms and payment.

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