AP Notes: Setting up a company in Ireland

AP Notes: Setting up a company in Ireland

How much does it cost to set up a company in Ireland?

It costs roughly €300 + VAT if you use a company formation office. If you complete the process yourself the cost is €50, which is the CRO filing fee.

If you are a non-EEA resident you have the additional set of purchasing a non-resident director bond which costs €2,000 (including VAT) and lasts for 2 years.

If you don’t have a registered office in Ireland you can rent one for roughly €200 + VAT per year. This will be for correspondence only. Please note this doesn’t mean you are regarded as being a tax resident. You are required to have staff working in the office among other factors.

Each year you will need an accountant to complete a number of returns including filing your annual accounts. The cost of this annual return can range from €1,000 – €2,000 + VAT for small businesses. The fee will be influenced by a number of factors including the number of transactions, number of staff and the quality of your bookkeeping. 

How can I set up a company in Ireland?

You can contact one of the accountants listed on AccountantPages. You can also contact any company formation office. 

You can also register on core.ie and complete the process yourself.

How long does it take to set up a company in Ireland?

It takes roughly 3 – 8 days. With COVID-19 things may move slower.

What information do I need to provide to set up an Irish company?

  1. Company Name
  2. Type of Company
  3. Constitution – The CRO provides a template so you don’t need to worry about this.
  4. Registered office – This must be in Ireland. 
  5. Directors
    1. Full name
    2. Nationality
    3. Address
    4. Business Occupation
    5. Names of other companies other directorships are held
  6. Company Secretary
  7. Authorised and Issued Share Capital
  8. Shareholders

What are the benefits of setting up a company in Ireland?

  • 12.5% Corporate tax rate and 6.5% tax on profits made from intellectual property
  • 25% R&D tax credit
  • Double taxation agreements with an array of countries
  • Easy to setup a company
  • Administration costs are relatively low

Web Hosting – SiteGround

Website Hosting

If you are building your own website soon we would like to recommend you to use SiteGround as your hosting company. Their fees start at £5.99 per month. We had being previously hosted with Blacknight and our website was running very slow. It’s important your website loads as fast as possible as this will affect your ranking in Google as well as frustrate your customers. 

Unfortunately we had invested a significant amount of time and money in trying to optimise our website thinking our hosting wasn’t the issue. It was only when we switched hosting company we saw a positive difference. 

If you would like to test your website speed score you can use tools such as Google page speed and pingdom. It can also be useful to test competitors’ websites.

One caveat, it was a nightmare to try to setup an external SSL certificate. With Blacknight it was far easier and simpler. 

How to start a small business online

How to start a small business online

What business is right for you?

Before you start a business make sure the business you’re trying to start suits your skills, experience and budget. It’s important before you start a business to either have experience in the industry or be willing to put in the time to learn.

Starting a business requires an incredible amount of time so try to find something you enjoy doing if you can. At the very least make sure you understand why you’re starting a business. It could be because you’re sick of your 9-5 job or you want to travel. It’s really important the reason why you want to start a business is clear and important to you. It will help to keep you motivated during the numerous mundane tasks you will be required to complete.

If it is your first business it’s better to try something which doesn’t require a lot of investment. First businesses have a high failure rate so it’s better to start as small as possible and then scale up after you start selling.

Branding

One of the first things you’ll need to do is decide on a business name and logo. In general this is a difficult part but try not to spend too much time on this step. Once the business concept is proved in the marketplace the name and logo can be changed at any time.

When deciding on a name it is almost impossible to get a good .com as most are taken. If you are just a local business in Ireland a .ie is far easier to find. Also, if you are trading under a different name to your own you’ll also need to make sure that name hasn’t already been registered with the CRO. You can use their search page to check. You can register a business name through core.ie for a cost of €20.

Next is your logo. I would recommend outsourcing this abroad as some graphic designers here can charge a high fee. When trying to get your logo designed you should have a clear idea of what it should look like. Also providing examples of other logos you like and why will help the designer greatly.

Website & Payments

For your first website I would recommend using wordpress along with a predesigned template. The important principle is to keep your costs as low as possible in the beginning until you start making a profit. If you do seek advice, always ask a trusted source. Never seek genuine advice from someone trying to sell you a service.

WordPress and the templates available can be used for a range of businesses. If you are providing professional services or you are selling products online. It does take a bit of time to set up. You will also need to have a hosting package. I would recommend SiteGround. I did use Blacknight in the past but I found my website running very slow and have now started moving bigger websites to SiteGround. Their fees start at £5.99 per month.

You will also need an SSL cert to encrypt information flowing between your website and visitors. You can buy one for namecheap.com for $5-$6 per year. Please note, while in general SiteGround is a better hosting company it was a nightmare trying to set up a third party SSL cert compared to Blacknight. 

I would recommend using stripe to accept payments but there are alternatives available such as Paypal. I found their interface easy to use and it was easy to complete all of the compliance steps required. 

You will need to hire a developer to complete all of these steps if you have no IT background. If you have the time there are 100s of videos available on youtube to walk you through each of the steps. The cost of hiring a developer will vary depending on the type of website you want. You can hire someone locally through gumtree.ie or freelancer.com from around the world. I would estimate the fee to be between €500 – €1,000.

Getting your website found & Credibility

One of the biggest misunderstandings I have encountered is people think once the website is set up people will find it. Building the website is the easy part, getting people to find it is the most difficult part. It’s better to spend the least amount of money as possible on your website and the rest on marketing. There are so many websites online competing for attention. You need to be very clever in how you make people aware of your existence. 

If you are considering running ads on facebook or google start off with small experiments first. Spend no more than €10 – €20 on testing ads and see what works. It’s very easy to burn through cash marketing your business to people who have zero interest in it. With facebook you can track a customer from a facebook ad right up until they make a purchase. So you can calculate if I spend €x on ads on facebook I will make €y in revenue. 

It’s really important to try to establish credibility on your website. As you are a new business no one will have heard of you and you will have no established trust. One of the best ways to build credibility is through customer video reviews. The majority of people don’t want to be on camera so they are very difficult to get. You should try as much as possible to get genuine customer video reviews on your website. This will help build trust and credibility with potential customers who visit your website.

Social media

Social media can be a great tool to help your website get found as well as building credibility. Having a facebook page can allow you to create a following and engage with your customers. You can also offer your loyal followers discounts and discounts for their friends. 

You can also use social media to engage with those who already have a following similar to your target audience. Offering them your products/service as a prize or at a discount for their followers can help raise your brand awareness in a cost effective manner.

Social media also gives people an opportunity to share their experience with your company. They can write a review or share pictures which everyone in their network will see. 

Legal & Finance

Generally if you’re just starting it’s better to be a sole trader. We’ve written an article on the advantages and disadvantages of a sole trader v a limited company. As mentioned above, if you are trading under a name which is different to your own you need to register that name with the CRO. It is your responsibility to ensure the name isn’t already registered. The CRO will not do this for you. You only need to register for VAT once you’ve reached certain sales thresholds. 

Please be aware there are many grants available for startups and to help you with the cost of your online business. For example, there is an innovation voucher worth €5,000 and there is also a grant which contributes toward the cost of getting online. This grant is for €2,500 and covers 90% of the cost of getting online.

€3,000 Financial Support for Businesses who take on apprentices

€3,000 in funding available for employers who hire apprentices

The Irish Government has launched a new apprentice scheme for employers. They are providing €3,000 in financial support to those employers who take on apprentices. 

The government is trying to grow the number of apprentices in Ireland which currently stands at 18,000, across a wide range of occupations from electrical, construction and engineering roles to healthcare, information technology and financial services. 

Simon Harris said “It’s a win-win – help develop an apprentice’s potential while you develop your company.”

Employers are entitled to the funding if they have registered a new apprentice from March until the end of the year. They will receive €2,000 up front and €1,000 in 12 months time.

For further information on the scheme please visit: http://www.apprenticeship.ie/en/employers/Pages/EmployerInfo.aspx

 

Source:

https://www.gov.ie/en/press-release/39851-minister-simon-harris-launches-financial-incentive-scheme-for-employers-to-recruit-apprentices/#:~:text=Minister%20Simon%20Harris%20launches%20financial%20incentive%20scheme%20for%20employers%20to%20recruit%20apprentices,-From%20Department%20of&text=These%20teams%20showcase%20the%20talent,the%20end%20of%20the%20year.

How to close a limited company in Ireland

How to close a limited company in Ireland

The fee charged by professionals for closing a limited company in Ireland is roughly €300 + VAT which includes the CRO fees as well as advertising in a national newspaper.

In order to close your limited company you need to apply for a voluntary strike off with the CRO. The CRO has a number of conditions which must be satisfied in order to close your company.

  • Draft director statement that the company must have never traded or has ceased trading
  • Special resolution passed and form G1-H15 completed. Online free (core.ie), paper €15.
  • Must have completed form H15 (filing fee €15)
  • The amount of assets does not exceed €150
    The amount of liabilities does not exceed €150 including contingent or prospective liabilities (Liabilities cannot be netting off against assets).
    All returns to date have been completed
  • Request a letter from Revenue that they have no objection to the company closing.
  • You must place an ad in a national newspaper of your intention to close your company. A sample advertisement is available here. The fee for example in the Irish Times is €74.95 + VAT as per their current rate card.

When the above have been completed it takes roughly 3 months for your company to be taken off the CRO register.

If you have a very simple business it is possible to do this yourself. If you have any doubts about how to complete the above steps it would be better to seek the advice of an accountant or a professional. If you complete any of the above steps incorrectly it could end up costing you a lot more in the long run.

How the Corona Virus is Affecting SMEs​

Self employed allowable expenses in Ireland

How the Corona Virus is Affecting SMEs

Company Formations

Andrew Lambe, director of the Company Bureau has stated the new company registrations in the state have fallen by 39% in the first half of March 2020. This figure is expected to accelerate as demand falls and unemployment increases.

Andrew went further to say: “Based on new orders and enquiries, we are expecting to see the numbers in April down 50pc or even more. This is extremely worrying for the Irish economy.”

Some of this slow down is also partly due to the precautions the CRO has taken. Initially the CRO was completely closed. Now they do not accept deliveries from couriers. This reduced service will have slowed down the number of applications they can process.

Self employed allowable expenses in Ireland
Self employed allowable expenses in Ireland

Increase in .ie Domain Names

As a result of the restrictions being placed on how businesses operate and the agile nature of SMEs, the number of .ie domain names has increased. David Curtin, CEO of the IEDR has stated they have seen an increase of roughly 30% in new .ie domain name registrations in April compared to the same period last year. 

The increase in websites on the Irish market will be fuelled by the resilience of Irish entrepreneurs trying to find new ways to reach their customers. Selling online offers new opportunities to small businesses who would have traditionally sold through their brick and mortar premises. Without establishing a digital presence traditional businesses have no route to market until the lockdown restrictions are lifted.

There are also a number of supports available such as the trading online voucher run by the Local Enterprise Offices. This grant covers 90% of the costs for small businesses who are trying to get online up to a maximum of €2,500

Supports Available for Your Business in Ireland

Funding available for your Business in Ireland

Supports Available for Your Business in Ireland

Introduction

Below are some of the supports available to help your business get started in addition to the existing supports. For a complete list of supports please visit https://dbei.gov.ie for further information.

It’s important during these difficult times you are aware of what supports are available to you. SMEs in Ireland are facing unprecedented challenges and need all the support they can get. If you are facing difficulties please note there are plenty of other supports available.

The Local Enterprise Offices also offer free mentoring advice. They offer both group advice and one to one advice. This is currently being delivered online through zoom.

Funding available for your Business in Ireland

Restart Grant - €10,000

The aim of the restart grant is to provide funding to micro and small business to help them with the costs of reopening and employing people. It is available to businesses which have a turnover of less than €5m, employ less than 50 people and are closed or have had a projected reduction of 25% in turnover to June 2020. The application is available online from all local authorities.

Trading Online Voucher - €2,500

The voucher is provided through the Local Enterprise Offices. It is available to small businesses with up to 10 people. The aim of the voucher is to help businesses sell their products or services online. Previously they provided up to 50% of the costs. Now they are covering up to 90% of the costs for a limited period up to a max funding of €2,500.

COVID-19 Online Retail Scheme - €10,000 - €40,000

This funding is aimed specifically at retailers and is run by Enterprise Ireland. It’s aim is to help retailers enhance their digital capability. You must employ 10 or more people on or before 29 Feb 2020. You must clearly demonstrate you have the potential to create and sustain jobs. Grants are from €10,000 – €40,000.

Professional Services Grants

COVID-19 Business Financial Planning Grant - €5,000

This grant is dispersed by Enterprise Ireland. It is designed to help businesses with financial planning as well as the preparation of applications for finance for finance providers. Applications are online and cover 100% of the costs up to €5,000. The funding can only be used on approved financial consultants.

Lean Business Improvement Voucher - €2,500

Similar to the above grant, the Lean Business Improvement Voucher is provided by Enterprise Ireland.It is available for training and advisory services from approved consultants. 100% of the costs are covered up to a max of €2,500 in funding being provided. The funding can only be spent on approved consultants.

Helping Businesses in Ireland: Collaboration

Collaboration: Co-Founders, Referral Groups and Knowledge Sharing

Express Your Interest

If you are interested in:

  • Finding a co-founder
  • Creating / Joining a Referral Group
  • Knowledge Sharing
  • Connecting with those interested in being involved in startups

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How can collabration help my business?

Marketing for Accountants in Dublin

Co-Founder

Finding a co-founder can often be a critical step in starting your business. As the environment in which business operate become more complex it becomes more challenging to start a business on your own. Having a co-founder can help bridge the gap in your skillset. 

Increase Sales

There are businesses in different industries which have the same target customer as you. As you are not in competition, this is an opportunity to leverage each other’s client base. For example, an accountant and a web developer could work together to recommend each other’s services

Reduce Costs

Knowledge Sharing

This is an opportunity for early stage entrepreneurs to work together to help each other to get the business started. Each entrepreneur has different skills and experience. For example, an accountant can help a web developer with his company legal structure, VAT and startup funding. The web developer can in turn help the accountant with their website.

Volunteering & Internships

There are a number of people who are happy to share their advice and experience to help businesses get started. There advice could save you both time an money. There are also people who are very eager to gain experience for their CV. The experience you give them could be the stepping stone they need to get their career started. 

April Question & Answers

April 20 - Questions & Answers

Introduction

Each month we’ll take 5 questions our audience have and write an article. This month’s 5 questions are:

  1. How can I get a logo for my business?

  2. Are there any grants available to get online?

  3. When is a sole trader a better option over a limited company?

  4. How can I reduce my accountant fees?

  5. Can I switch from a sole trader to a limited company?

How can I get a logo for my business?

The cost of a logo for a small business can vary quite a lot from €75 – €500. When looking for a logo designer it’s important to have some idea of what you are looking for. At a minimum you should know what colours you’ll be using and have examples of 3 logos you like and why. This will help you get a better quote and minimise any rework.

You can find people to design your logo through gumtree.ie or freelancer.ie. If you are a new company my advice would be to keep you costs to a minimum. You can always change your logo in the future. Some of the graphic designers I’ve encountered have had a tendency to overstate the importance of your logo to charge higher fees so be careful.

Getting Online Grant

There is a grant available to get online which is available through the Local Enterprise Offices. They will cover 50% of your costs up to a maximum of €2,500. You can apply here for the grant.

Please note from April 2020 to September 2020 the amount you need to contribute has been reduced to 10% meaning you get a 90% contribution towards your costs.

When is a sole trader a better option than a limited company in Ireland?

changing-from-sole-trader-to-limited-company-ireland

A sole trader is the better option when you are just starting and you have uncertainty about the level of profits you will make. In addition, if the profits you will make in the early years will be very low then you should run your business as a sole trader. We have a more detailed article here on the benefits of a sole trader v a limited company.

How can a small business reduce its accountant fees?

  1. Use an online accountant who is based outside of Dublin city centre or works from home. These accountants will have a lower cost base which 

  2. Ensure you keep proper records, tracking all expenses and being able to provide the back up to support those expenses such as invoices or receipts. At one end of the spectrum you have receipts in a show box approach. The other end is having a folder (hardcopy or on your computer) with backup for all expenses and revenue with the information summarised in excel.

  3. Shop around. Even if you have no intention of switching accountant it can be useful to check if you are being overcharged. If you do decide to switch make sure you check the accountant’s references. Stay away from any accountant who can’t provide references from at least 2 customers.

Can I switch from being a sole trader to a limited company?

Yes you can change from being a sole trader to a limited company at any time. You can claim relief on any assets you transfer to the business. Also, you need to deregister your business name with the CRO and re-register the name under your limited company. We have a more detailed article here on the topic.