Foreigners who want to expand their businesses in Ireland can choose from two options, either a branch or a subsidiary office. The difference between the two is determined by the degree of independence the establishment can have when discussing in terms of the parent company.
Branch office in Ireland
A company branch has restricted commercial independence. Therefore, it should implement the same type of commercial activity as the parent company. It is also prerequisite that the company branches use the same name as that of the parent company.
The upside to a company branch is that it allows a local or foreign company the professional presence at another location.
Since no minimum capital would be required, the company branch will have low set-up costs. According to taxation terms, all companies which are formed as branch offices in Ireland will accountable for paying a corporate tax only exclusive to their activities on the Irish territory. It is also mandatory for the branch to register for taxation purposes, along with those associated with the taxation of employees who are working in the corresponding establishment.
As soon an Irish branch is registered with the Companies Registration Office, it should also be registered with the corresponding tax authorities for taxation purposes. It is mandatory for all Branch offices located in Ireland to submit their annual accounting state of affairs and audited reports of the parent company with the Companies Registration Office.
When Branch offices are hiring personnel, it is prerequisite that they register the employees for payroll tax deductions and other mandatory social insurances.
Subsidies are required to implement a decentralized business model. Therefore, the independently managed entities would be self-sufficient on respect to both finances and operations. Thus, each business unit would be totally responsible for its own finances– cater for its own risks and resolve any ramifications that may occur as a result of bad decisions. That means whatever happens to one business unit should not affect foreign companies.
The majority of subsidiaries located in Ireland are registered as limited liability companies. The upside to this arrangement is that they can also benefit from the same taxation as it is in the case of new entities located in Ireland. After registering with the Companies Registration Office, the company should register for corporate TAX and, depending on intending activities, VAT. Concurrently, the subsidiaries who are responsible for employing the workforce should also register as an employer and operate the payroll in accordance with the current legislation.
In a nutshell, setting up a subsidiary in Ireland is quite a simple and easy process. It offers a whole lot of business opportunities beneficial for companies considering to expand their businesses to foreign territories.
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