Investing in Ireland
Doing business in Ireland
As one of the leading professional services firms in the world, Crowe can provide you with the reassurance and expert advice you require to maximise the return on your investment in Ireland. Find out more about the range of services we can provide.
- Life sciences
- Information and communications technologies
- Consumer and industrial products
- Financial services
Ireland and its capital continues to invest in its communication infrastructure and Tholons 2021 Services Globalization Index ranked Dublin seventh in the world for digital innovation and transformation.
Ireland has the youngest and most educated workforce in Europe and the UN 2020 Human Development Index placed Ireland second for its quality of life.
These are some of the reasons why Ireland has been able to attract many of the leading global organisations. The OECD recognises Ireland as the top destination for foreign direct investment.
Crowe – your partner in Ireland
Learn more about investing in Ireland:
Ireland continues to attract a significant level of foreign investment due to a number of factors:
Access to the EU
An educated workforce
The Irish workforce is productive, capable and highly adaptable. We have the youngest population in Europe with one third of the population under 25 years old and one of the most educated workforces in the world.
A favourable tax regime
Ireland also has one of the most advantageous corporate tax systems within the EU, with 12.5% corporate tax rate, 6.25% rate on profits from certain intellectual property and a favourable holding company regime. Ireland is also part of a growing double taxation treaty network with 74 treaties signed. Ireland’s tax system ranks as the most effective in the EU for paying business taxes and the fourth most effective worldwide.
A pro-business environment
Ireland is a dynamic business location, offering competitive operating costs and high quality services. We have a dedicated government agency – the IDA – responsible for the development of foreign industry and enterprise in Ireland. IMD World Competitiveness Yearbook 2020 ranked Ireland 12th most competitive economy in the world and 5th for business efficiency.
An enterprise may conduct its trade or business in the Republic of Ireland in one of several organisational forms, including:
- A private limited company
- A public limited company
- A company limited by guarantee
- An unlimited company
- A branch of a foreign company
- A partnership
- A limited liability partnership
- A unit trust/UCITS (Undertaking for Collective Investment in Transferable Securities)
- A sole proprietorship
Each business entity listed above is subject to specific tax laws. Companies and branches of overseas companies are subject to tax at the corporate tax rate. Individuals, including partners of partnerships and sole proprietors, are subject to tax at progressive marginal income tax rates.
Company taxes
A company that is resident in Ireland is taxable on its worldwide profits. A company that is trading in Ireland through a branch or agency is only liable in respect of the profits that are attributable to that branch or agency.
Key company tax rates
There are three main rates of corporation tax:
- 12.5% for trading income
- 25% for non-trading income (e.g. investment income, rental income)
- 6.25% for profits earned from patented inventions and copyrighted software
There are a number of specifics relating to the calculation of profits and how loses are treated, the repatriation of profits from Ireland, withholding taxes, etc. For greater detail on company taxes please download our free guide – Investing in Ireland.
Personal taxes
An individual’s liability to Irish income tax depends on their residence status, which is determined by the number of days that they are present in Ireland in a tax year. You will be resident in Ireland for a tax year in either of the following circumstances:
- If you spend 183 days or more in Ireland during a tax year, or
- If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be regarded as resident for the second tax year
Persons who are resident and domiciled in Ireland for tax purposes are subject to tax on their worldwide income. Non-Irish-domiciled individuals who are resident in Ireland are taxable in Ireland on Irish source income (including foreign employment income referable to duties exercised in Ireland) and foreign investment income where that income is remitted to Ireland.
Employees moving to Ireland may be able to claim reimbursement of some relocation expenses tax-free or be eligible for tax-free subsistence for temporary assignments. If assigned to work in Ireland on a permanent basis, employees may be eligible for a tax-free exemption on 30% of their employment income over €75,000.
Companies may transfer the R&D credit to key employees who have been involved in R&D activities, subject to certain conditions.
Ireland has long been a location of choice for multinationals wishing to establish a holding company as either their EU headquarters, or for the purposes of holding shares in subsidiaries and managing other investments.Some of the key features of the Irish tax regime that make Ireland an attractive location are as follows:
- Irish capital gains tax exemption for disposals of qualifying subsidiaries by an Irish holding company. The Irish holding company must hold at least 5% of the subsidiary, which must be resident in an EU or treaty jurisdiction (such as the US, UK and China) and pass a trading test
- A 12.5% rate for dividends sourced from trading activities. A generous system of foreign tax credits (including onshore pooling) can further reduce or eliminate any Irish tax
- Domestic exemptions from Irish withholding taxes on payments of dividends, interest and royalties to persons resident in tax treaty partner countries (and additionally, in the case of dividend payments, to companies controlled by persons resident in tax treaty partner countries)
- Tax relief for interest on qualifying debt to fund qualifying share acquisitions or to fund connected companies
- No specific thin capitalisation rules. An Irish holding company may consequently be financed largely by way of debt
- An extensive double taxation treaty network with treaties signed with 74 countries to date, including all EU member states as well as Australia, Canada, China, India, Japan, Russia and the United States
- A tax deduction in respect of capital expenditure incurred on most forms of intellectual property
- An R&D tax credit for 25% of qualifying expenditure
- No capital duty on the issue of shares. A stamp duty exemption on the transfer of intellectual property
- A 6.25% tax rate to profits earned from patented inventions and copyrighted software, to the extent it relates to R&D undertaken by the company
Doing business in Ireland
As one of the leading professional services firms in the world, Crowe can provide you with the reassurance and expert advice you require to maximise the return on your investment in Ireland. Find out more about the range of services we can provide.
