Setting up and registering a business in Ireland or indeed in any jurisdiction, can be a daunting task, particularly if it’s your first time. Luckily, the process is relatively simple and there are some great resources available to help you.
Before you go ahead and register a business you will need to decide a few things and this is where the dreaded ‘analysis-paralysis can set in, but once your mind is made up and clear on these issues, the setup will be reasonably straightforward.
Some of the things you will want to do in advance include deciding on your legal structure, choosing a unique name for your business and online presence, and deciding if you would like to pay VAT or not in your first year. If you have no idea about your business name – use a name generator like namelix.com
Once you and any business partners have decided on each of these things, everything else can be done online or with the help of a broker/accountant, without any need to present yourself at a government office.
Let’s take a look at these decision points one by one.
What Should I know Before Registering a business in Republic of Ireland?
Decide Your Legal Structure
This may be the hardest decision you need to make before submitting your documents online. I’m not going to lie and say that this is an easy decision to make, as there are pros and cons to each option, but having said that, once you understand the issues involved, it shouldn’t take that long.
There are three main options to consider when you register a business in Ireland and these are:
• Sole Trader
If you plan to work solo and build your business slowly from the ground up without much funding. Then usually the first option will be the best for you. In this case, the process is very simple. You will need to go to the revenue.ie website and register as a self-employed person. To do this all you will need is a PPSN number and an address. The process is very straightforward and can be done in minutes provided you have all the documentation and information required.
As a Sole Trader, you will pay income tax (IT), PRSI, and USC. If you employ anyone then you will have to do the same for them.
The main downside to being a Sole Trader is if the business folds and incurs debts then you will be held personally liable and may lose personal assets in order to pay debts.
If you go with Partnership then the process is a little more involved. You will obviously need to enter into an agreement with a partner and you will require one person to be responsible for all record-keeping, known as the ‘Precedent Partner.’
Each partner has to pay all of the same personal income taxes as a Sole Trader, as well as their share of tax on any business profits. The annual returns for a partnership must be filed by the Precedent Partner. Some intermediaries, for an annual fee, will provide an acting Precedent Partner for your business.
When you register a business in Ireland with revenue for a partnership you will be issued with a Tax Reference Number for your business, separate from your PPSN.
If you decide that you would like to form a company, then the process is a little more involved again while offering more personal protection than either of the two preceding options.
A company in Ireland is a legal entity and is treated separately from the individuals who own and run it.
A company must pay Corporation Tax which remains quite low in Ireland and is one of the main advantages of forming a Company versus a Partnership or becoming a Sole Trader.
As with a Partnership, once registered, revenue will issue the entity with a separate Tax Reference Number.
One thing to note is that if you decide to start as a Sole Trader with employees, it will always be possible to later form a Partnership or Company. If you start with a Partnership or Company and decide that you prefer to be a sole trader, then the process will be a little more involved.
Decide on Your Domain Name & Hosting Plan
Once you have decided on the above, next comes choosing your domain name and hosting plan (learn more about best optimized irish wordpress hosting) The choice of a business name is important, although not so important that you should let it slow you down by more than an hour or two.
Choosing a name is beyond the scope of this article, but a good tip to bear in mind is that while you are brainstorming for ideas, you should have a browser open nearby with a domain name checker on standby. You should also have the Irish Companies Registration Office website open.
As you come up with amazing ideas for your new enterprise, put them straight into the checker to see if the name is already taken and then crosscheck the name with the CRO website to make sure the name hasn’t been registered in Ireland already. You can save a lot of time by eliminating options this way.
With your new name chosen, you now need to select your hosting plan. You should check them out if you are looking for a solution provider as they are often running excellent sale offers on annual hosting with domain names.
Register for VAT
No business owner or Sole Trader likes to hear these three letters of the alphabet together. However, if you are planning on being a Sole Trader and your projected income will be below a certain threshold, you won’t need to either register or pay for VAT. If you are forming a Partnership or Company then it will be best to consult with your Precedent Partner or Accountant to decide how you would like to proceed.
Now that you have a unique name, a domain name, and hosting and have decided what kind of business you would like to form, simply register the name with the CRO and then apply through revenue.ie to register your business for taxation.
It’s as simple as that! This is the last process at registering a business in Ireland.
Your business is now set up on paper and you are ready to start trading.
While this blog post provides a high-level overview of what needs to be done, there is of course some legal detail that you need to be aware of, and as we are neither solicitors nor financial advisors, you will need to look into these independently. Any advice given here is informational only, so please use it at your own risk.
The resources listed below, however, will provide you with all the source information you need.
Registering your business for tax purposes:
General information about choosing a legal structure, taxation, and business registration: