Ireland is home to a number of major tech companies, including Microsoft, Apple, and Meta. Known as a friendly country with high levels of education, Ireland is a booming talent hotspot for companies looking to recruit top talent. With significant growth in sectors such as IT, energy, environmental engineering, and medical devices, the country is quickly becoming one of the most important economies in the European Union.
Establishing a subsidiary in Ireland can be a viable move to extend your business’ reach into the European Union (EU). Once your subsidiary is established, your company has access to all 28 countries belonging to the EU.
This indeed sounds like a great deal–and it is. However, you will have to be intimately familiar with Ireland’s subsidiary laws, which is not always feasible for small businesses or startups looking to scale up quickly. If you’re just looking to hire some teammates in Ireland and test out the market, then partnering with an EOR service like Via might be a better option.
Regardless of which path you choose, understanding how to set up a subsidiary can help you make an informed decision about how to grow your global business.
An Irish subsidiary is an independent legal entity that is separate from its foreign parent company, either partially or entirely owned by the said company. Typically, subsidiaries are limited liability companies (LLC), which means the parent company’s liability concerning the subsidiary is limited.
Most subsidiaries in Ireland need to register with the Companies Registration Office (CRO) as LLCs. To form a business subsidiary you will need to meet the following requirements:
Select a distinct company name that doesn’t infringe upon existing businesses or trademarks in Ireland
Complete a Form A1 and Constitution for the CRO
Have at least two directors, one being an Irish citizen
Provide the minimum share capital
Possess a registered office address and a business address in Ireland
Nominate a company secretary
Limit the number of shareholders to 99
Present the parent company’s resolution, which explains the reason for creating a subsidiary in Ireland
Register with the local tax office, as well as for value added tax (VAT), and social security
As your business is fulfilling the above requirements, it would also be a good time to learn or review Ireland’s subsidiary laws and regulations or to consult an EOR regarding such laws.
Many companies operate in Dublin, though Cork and Galway are also good options.
To make sure you’re compliant with all of Ireland’s subsidiary laws and regulations, you will need to properly and thoroughly register and provide the mandatory documents, per the CRO and Irish government.
Your subsidiary must maintain compliance with local labor laws, which can be an in-house responsibility of the parent company, newly established subsidiary, or a third-party global payroll provider.
Subsidiaries are also required to file annual returns, also known as Form B1, which can be found online. And, of course, subsidiaries are liable for corporate taxation in Ireland. The corporate tax rate is 12.5%, but some businesses qualify for different rates. Ultimately, a business must know its rights while operating in a foreign country.
As with any situation or decision, there are pros and cons to consider, and setting up an Ireland subsidiary is no different.
Some of the pros include:
One of the world’s lowest corporate tax rates
Barrier-free access to the EU’s member countries, as well as the UK, for free movement of goods, capital, services, and people
A relatively young, highly educated workforce
Readily accessible healthcare
Freedom with advertising and marketing
Subsidiaries in Ireland also benefit from the same tax treatment as Irish-based companies, which means they qualify for the same deductions and benefits as domestic businesses. In addition, an Ireland subsidiary can operate under its own rules, separate from its parent company, because it is an LLC.
This type of freedom enables an Ireland subsidiary to tweak its workplace setting to accommodate its Irish employees. And, as an LLC, the subsidiary won’t directly impact the parent company or organization on the off-chance any legal issues arise, which is a key advantage for the foreign company and shareholders.
Some cons include extensive labor laws and subsidiary laws, employees who work with a business for a year are entitled to a permanent contract. The cost of living is higher than average in Ireland, and there are no laws in Ireland that protect trade secrets, know-how, or confidentiality.
Overall, it's up to you to decide whether the pros outweigh the cons when setting up a subsidiary in Ireland. Every business is different, and for some, a subsidiary may not be the best fit.
Company formation and registering a subsidiary is complicated, which is why many foreign businesses look for third-party partners to streamline the process.
To work with a PEO, your business must have a subsidiary or entity already established in Ireland. Without a subsidiary, you cannot partner with a PEO as co-employers, with the PEO handling all HR tasks. If you do not have a subsidiary but are looking for assistance regarding HR-related duties and compliance, then working with an EOR is the way to go.
A business may also establish a subsidiary but maintain HR and compliance in-house–no rule says that a company must work with a PEO or an EOR. It’s entirely up to you.
Both large and small companies want to hire employees and set up an office in Ireland, but are unsure of how to navigate the country’s payroll and labor laws, or if it's the right time to incorporate their company in Ireland. As a separate legal entity, Via makes hiring Irish talent and building your global team seamless. Our easy-to-use platform helps you manage the local HR processes for benefits, international payroll, background checks, and more. We have a local team of lawyers and on-the ground experts that understand compliance as you expand abroad.
As your employer-of-record in Ireland, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team. We streamline the process with our wholly owned entities.
With Via’s transparent pricing, you can pay full-time employees or contractors in Ireland with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums–start with 1 employee and scale up at your own pace.
An Ireland subsidiary is an independent legal entity or business, separate from its foreign parent company, either partially or entirely owned by the said company. Typically, subsidiaries are limited liability companies (LLC), functioning within the Irish government’s rules and parameters and complying with the country’s labor laws. This is different from setting up a branch in Ireland. To register a branch you will need to take a different approach.
There are numerous steps to setting up a subsidiary in Ireland, which include selecting a distinct business name, filing the proper documentation, having two directors and no more than 99 shareholders, applying for the certificate of incorporation, registering with the Companies Registration Office (CRO) and appropriate tax office. The majority of private companies in Ireland are limited by shares.
A sister Irish company is another term for a foreign business’ subsidiary in Ireland. The two or more sister companies are owned by the same shareholder or group of shareholders, but all business practices and accounting remain separate.
In Ireland, a parent company may be held liable by third-party companies or individuals if they claim to maintain control and supervision of the subsidiary. And, if the parent company is the sole shareholder of the subsidiary, they will most likely be liable should any non-compliance issues arise.
The Articles of Association are a set of rules that dictate how your company should be managed. These rules can be amended as necessary.
An Designated Activity Company (DAD) in Ireland is a limited company that clearly defines and lists its business goals and activities in a document known as a constitution. This type of company is usually launched for a specific purpose, such as charity.