The question of whether to set up your business in Ireland or the UK has often rested heavily on the issue of taxes. However, the impending Brexit has completely changed the landscape.
Effects of Brexit
The United Kingdom is on the verge of making an exit from the European Union. The estimated date of exit is in October 2019. The change to be brought about by this arrangement will affect British based businesses with interests in Europe. The special privileges British based companies enjoy in other EU member states such as favorable customs and duty impositions are at risk of being revoked. Alternatively, Britain can negotiate for free trade agreements on its own.
Ireland’s EU advantage
Ireland has quite a stable relationship with the EU and is not facing a huge overhaul like its neighbor. The Irish continue to enjoy the benefits of being associated with the EU. Investors are not affected by Withholding Tax on dividends from Irish holding companies in EU countries.
Furthermore, the Euro has been adopted as currency in Ireland. Therefore the headache of currency exchange are not part of an Irish based company. Brexit leaves Ireland as the only English speaking member country of the EU.
Other advantages of setting up a business in Ireland
Ireland has a very attractive tax regime in comparison to Britain. The corporate tax rate stands at a low 12.5%. In addition to this, companies can claim tax relief on research, development , and expenses on intangibles such as intellectual property. Shareholders in Irish based Holding companies are not liable for withholding tax on dividends to countries with tax treaties in Ireland. The Republic of Ireland has a highly regarded Holding Company regime. Companies are guaranteed to fully enjoy the benefits Ireland has to offer as they will be dealing with a state acclaimed for its business-friendly environment, low bureaucracy , and ease of doing business.
Options for Irish company formation
Ireland offers numerous and flexible company registration structures.
The company can be registered as an Irish Subsidiary Company with a 51% majority shareholder being an existing British firm or overseas company. This is an ideal option for UK based firms seeking to take advantage of the benefits offered by Ireland in the face of Brexit. Firms can also register an Irish Branch Company which is recognized as an extension of its parent company and thereby cannot issue out shares. With the beneficial Holding company regime, investors can take advantage and register an Irish Holding Company which in turn holds shares in subsidiary companies. Another option would be to register a Stand Alone Irish Company. This option will require a transfer of assets from an existing overseas business to the newly registered Irish company.
For more details and assistance regarding Ireland post Brexit, you can contact our expert consultants. Our highly experienced and well-informed team is ready to answer all your questions and give you all the help you might need.