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Starting a Business in Ireland

By Earl Murray,2014-07-10 10:01
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Starting a Business in Ireland ...

    Starting a Business in Ireland

    Information Pack

    2007

Compiled by Cork Chamber

    With specific information on the Galway region provided by: Galway Chamber a member of the Enterprise Europe Network

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    USINESS PLANNING The more original and innovative your

     ideas, the more likely you are to B

     receive funding for your business.

    Starting a business involves a lot of For more information on writing a courage, determination and planning. business plan see the following: In order to know which organisations - www.startingabusinessinireland.coto approach for help, advice, funding m etc. it is imperative that you have a - www.aib.ie/business/starting-clear idea yourself about the kind of business-ireland.html

    business you want to start. The more - www.bankofireland.ie/html/gws/bprepared you are, the smoother and usiness/start_your_own_business/simpler the whole process will be. business_start_up_guides/index.htAsk yourself some basic questions: ml#doclink2

    - Am I providing a product or a

    service? YPE OF COMPANIES T - Where do I want to locate my

    business? - How much money will I need to

    invest in the business in terms of A company is a legal form of business premises, equipment, transport organisation. It is a separate legal etc.? entity and, therefore, is separate and - How many people will I need to distinct from those who run it. The employ? company (and not the individual shareholders) is the appropriate To help you on your way, the Basis person to be sued in the event that Project has created a workbook based debts are incurred by the company on a 3-step strategy: ready, steady which remain unpaid, despite demand. and go. This workbook is designed to

    take a potential entrepreneur through The Companies Acts generally allow the whole process of starting a one or more persons to form a private business, from initial planning to the company for any lawful purpose by practicalities of start-up. subscribing to a memorandum of association. However, a public limited The workbook, which is available on company, a public unlimited company, www.basis.ie, contains the following or a company limited by guarantee steps: not having a share capital, must have at least seven subscribers. A private ? Ready: covering preparation, self-company may have a maximum of 50 assessment, ideas generation, members and there is no limit on the market research and training for number of members in public entrepreneurs. company. ? Steady: the bulk of the guide, covering business planning, There are several different legal types raising finance, sources of of companies: assistance, choosing premises, recruiting staff, marketing, book-Limited companies keeping and management issues. In a limited company the shares are ? Go: when everything has been owned by its shareholders. If the thought through and you are company is a limited liability company, ready, this section provides the the shareholders' liability, should the remaining information you need to company fail, is limited to the amount, get started. if any, remaining unpaid on the shares held by them.

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    There are four types of limited the company, if it is a company with companies: limited liability, that fact must also be

     stated. - Private company limited by shares - Company limited by guarantee not ? Articles of association

    having a share capital This document sets out the rules - Company limited by guarantee under which the company proposes to

    having a share capital regulate its affairs. Articles are - Public limited company required to be registered by a

     company limited by guarantee and Single-member company having a share capital or an unlimited A single member company is a private company. Articles must be printed company limited by shares or a and divided into paragraphs and guarantee company having a share numbered consecutively. A Company capital, which is incorporated with one limited by shares or a guarantee member, or whose membership is company not having share capital reduced to one person. However, the may register articles with the CRO. company must have at least two directors and a secretary.

     ? Form A1 Unlimited company This form requires you to give details In an unlimited company, there is no of the company name, its registered limit placed on the liability of the office, details of secretary and members. Such a company must have directors, their consent to acting as a minimum of two shareholders. such, the subscribers and details of

     their shares. It incorporates a Undertakings for Collective statutory declaration that the Investment in Transferable requirements of the Companies Acts Securities (UCITS) have been complied with, and as to UCITS are public limited companies. activity which the company is being The sole object of a UCIT is the formed to engage in. All forms are collective investment in transferable available on the Companies securities of capital raised from the Registration Office website www.cro.ie.

    public that operates on the principle of risk-spreading

     Note that in Ireland membership of European Economic Interest the Chamber of Commerce is Groupings (EEIG) voluntary. You must register your For more information on types of company with the CRO, after which companies see www.cro.ie („business you may choose to become a member registration‟ section) or www.basis.ie of your local Chamber of Commerce. („Legal and Regulatory‟ section). EGISTRATION FOR TAXES EGISTERING YOUR COMPANY R R In order to form a company, you need Businesses in Ireland are subject to: to send the following documents to the Companies Registration Office: ? Income tax on their profits (Sole traders and partnerships) ? Memorandum of association ? Corporation tax on their profits This document sets out the conditions (Limited companies) upon which the company is granted ? Value added tax (VAT) incorporation. It must contain

    provisions dealing with certain

    matters e.g. the name and objects of

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    ? PAYE/PRSI All businesses obliged to register for VAT if you

    with employees (including receive taxable services from abroad

    owner/directors). or if you are a foreign trader doing

     business in the State.

    It is your obligation to notify the

    Revenue Commissioners through your ? The standard rate of VAT is local tax office of the establishment of 21%: This applies to all goods your business and to provide them and services that are not with the information required to exempt or liable at the zero or register your business for the relevant reduced rates taxes. All the relevant forms are ? Reduced rate of VAT - available for download on the website 13.5%: This applies to certain of the Irish Revenue Commissioners. fuels, buildings and building

     services, certain newspapers Corporate Tax etc. Companies pay Corporation Tax. This ? Reduced rate of VAT - 4.8%:

    tax is charged on the company‟s This applies to livestock, live profits, which include both income greyhounds and the hire of and chargeable gains. A company‟s horses. income for tax purposes is calculated ? Zero-rated goods and in accordance with Income Tax rules. services: These include Chargeable gains are calculated in exports, certain food and drink, accordance with Capital Gains Tax oral medicine, certain books rules. etc.

     ? Exempted goods and Since 1 January 2003, Ireland‟s services: These include corporate tax rates are as follows: financial, medical and - 12.5% on all trading profits educational activities. - 10% for manufacturing, IFSC and

    Shannon companies (this rate is To apply for a VAT number, you

    still available to existing eligible need to contact The Revenue

    trades until 2010, as long as the Commissioners.

    trade qualified for the 10% rate All information on taxes and the rates

    before 30 July 1998) applicable to your product or service - 25% for non-trading income can be found on www.revenue.ie or

     www.accountingnet.ie. VAT

    You must register for VAT if you are a

    taxable person and your annual NTELLECTUAL PROPERTY turnover (i.e. the amount of your I receipts excluding VAT) exceeds or is

    likely to exceed the following annual

    limits:

     If you are providing a unique service ? ?70,000 for businesses which or producing any original or supply goods (where not less innovative articles, then it is than 90% of the annual important to consider your intellectual turnover is from the supply of property right. You can register goods) patents, trademarks and industrial ? ?35,000 for other businesses, designs with the Irish Patents including those supplying Office (www.patentsoffice.ie). This services office provides many different services such as: Businesses whose annual turnover is below these thresholds are not ? The granting of patents required to register for VAT (but may ? The registration of industrial choose to do so). You may also be designs and trade marks

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    ? Providing information in National Irish Bank:

    relation to patents, designs www.nationalirishbank.ie

     and trade marks

    Depending on the bank and branch, it ? Certain statutory functions

    may take a few days or a few weeks under the Copyright and

    to clear all the paperwork associated Related Rights Act 2000 (e.g.

    with opening your company‟s bank registration of copyright

    account. Allow for this in your licensing bodies, references

    planning. If you need immediate and applications relating to

    access to the money you are lodging, licensing schemes operated by

    your bank can usually arrange for those bodies and the resolution

    temporary cheques to be made of disputes regarding royalty

    available while a chequebook is being amounts)

    printed.

It is strongly recommended to seek NSURANCE

    the help of professionals when looking I for financial and legal advice. If you

    employ the services of a solicitor and

    an accountant while you are setting The main kinds of business insurance

    up your business then they will be are fire, theft, burglary, all risks,

    available to advise you in the case of products liability, public liability,

    any kind of legal problems or queries. employer‟s liability and motor

     insurance. Most insurance companies

     offer these on a single “office” or

    INANCIAL SUPPORT AND business policy.

    FUNDING F Other kinds of insurance available are

     business interruption, credit insurance,

     patents, goods in transit etc.

    Many people are interested in finding Regarding personal insurance, key

    out whether there is funding or person insurance is an insurance

    financial support available for their option.

    company. When looking for sources

    of finance for your business it is PENING A BANK ACCOUNT

    important to remember the following: O

    - Most organisations will not provide

    funding in the form of grants or There are quite of few national banks

    subsidies for businesses that in Ireland who can help you to open a

    provide a service/product that bank account for your business. If

    already exists. In these cases it you are starting a limited company,

    might be easier to try and source you need to pass a resolution of the

    finance in the form of a loan or Board of Directors to open a bank

    repayable private investment. account. Most of the major banks

     provide an advisory service for new

    - EU funding is usually made business start-ups.

    available through national,

    regional and local bodies and Some of the larger bank groups are

    programmes. as follows:

     Anglo Irish Bank: - You may apply directly for EU www.angloirishbank.ie funding through programmes such AIB Bank: www.aib.ie as FP7, but these funds are only Bank of Ireland: suitable for existing businesses www.bankofireland.ie (not start-ups) that wish to Ulster Bank: www.ulsterbank.ie engage in specific projects. In

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    these cases, applications for need to be accompanied by an in-

    funding must be made by a group depth business plan. This is

    of participants (often including particularly important in the case

    research and public institutes). of a start-up businesses, however

    See: even an existing company will also

    http://cordis.europa.eu/fp7/homeneed to justify exactly how the

    _en.html for more information. money they are applying for is

     going to be spent within their - In all cases, applications for business.

    funding from any organisation will

The basic chart below will give you an idea of which organisation you may be able

    to approach with regard to funding. More details information on the organisations

    that provide funding for businesses can be found in the remainder of this document.

     How many employees?

     Less than 10 More than 10

     Business Technology based Located in Shannon/ Shannon Innovation business? Mid-West region? Development Centres

     no no

     LEADER Rural-based Located in Gaeltacht Údarás na programme business? Regions? Gaeltachta

     no no

     City and County Enterprise Ireland Enterprise Boards

    More details about some of the main job creation and acquisition of capital organisations which assist SMEs in assets. Enterprise Ireland focus on sourcing finance/funding in Ireland 'high potential start ups' that fulfil the are given below: following criteria:

     ? You plan to operate in either Enterprise Ireland is the Irish state the manufacturing sector or in agency for the development and an internationally traded promotion of Irish-owned industry. service sector in an export led Enterprise Ireland deals with Irish environment; enterprises and is particularly focused ? Your proposed product or on high-potential start-ups, business service is technologically growth and research and innovation. advanced; Their funding is typically a mix of ? You are likely to achieve equity and grants and is specifically significant growth within three intended to meet expenses in the years (sales areas of research and design, training,

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    of ?1.0m and employment of egional Funding Programmes

    10 or more); R

    ? Your projected sales have a

    heavy export element; Regional City and County

    ? Your business is Irish owned Enterprise Boards (CEBs) are

    and will be located in Ireland. established as separate companies

     limited by guarantee. The Boards Enterprise Ireland offers a number of provide grants, repayable loans and categories of funding designed to help other assistance to „micro-enterprises‟

    expand your business and grow (i.e. firms with 10 or less employees), exports: however they are allocated funds for

    ? Funding for exploring new distribution in their area only, so you

    opportunities first need to decide where you would

    Preliminary funding to explore like to locate before approaching the

    new ideas/new markets, nearest office. CEB funding is

    including feasibility studies provided by the Exchequer through

    ? Funding for company the Department of Enterprise, Trade

    expansion and Employment (DETE). The DETE is

    Support for activities outlined the Boards‟ parent Department and

    in an expanding company‟s has policy, financial and

    business plan, e.g. investment administrative responsibility for them.

    in capital equipment, job They can assist eligible projects with

    creation, recruitment of key financial assistance packages such as

    managers, new start-up businesses or expanding

    training/management businesses that are involved in

    development and R&D. manufacturing, processing, or

    ? Productivity Improvement internationally traded services. The

    Fund packages available are:

    Companies can receive funding

    for capital assets, technology ? Financial Assistance towards

    acquisition and Capital Projects (I.e. provision of

    training/management new equipment or the

    development, that will lead to build/outfitting of workshop

    productivity improvements. premises)

    ? Strategic R&D projects ? Employment grants (towards the

    Projects with expenditure creation of new full-time positions)

    greater than ?3 million can be ? Financial assistance towards

    funded under a non-Feasibility Studies (looking at new

    competitive research product prototype development

    programme. and innovative services)

    ? Research Technology & ? Equity packages (for high-

    Innovation (RTI) Scheme potential Start-up or expanding

    R&D projects with expenditure businesses)

    greater than ?95,200 can be

    funded under the competitive Udaras na Gaeltachta assists

    RTI scheme. R&D projects with businesses in the Gaeltachta (Irish-

    expenditure less than ?95,200 speaking) areas. General Financial

    can be funded under the non-Assistance includes employment

    competitive RTI scheme. grants, capital grants on new

     equipment and buildings, training (For more see: www.enterprise-grants. Levels of financial assistance ireland.com) are negotiable, depending on location,

     skill levels and employment potential.

     Financial Assistance towards

     technological advancement includes:

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    ? Feasibility Study Grants payable local area. To locate your nearest

    up to 50% of costs incurred during action group, see the following link:

    investigation stage. www.ilsu.ie/LEADERgroups.html ? Research and Development Grants. (For more see: www.ilsu.ie) ? Licensing Grants ? Joint Ventures incentives Business Innovation Centres

     (BICs) are private companies that

    (For more see: www.udaras.ie) can assist entrepreneurs and SMEs in

     identifying and accessing business The Irish LEADER network is a finance. There are 150 similar centres group of 36 regional Local Action throughout the EU. Irish Network: Groups that are responsible for www.dbic.ie allocating funding to projects and businesses that are set-up in rural The WestBIC is the Business & areas. This funding is a combination Innovation Centre in the Border, of EU funding under the LEADER Midland & Western region of Ireland initiative and national funding from providing tailored support to the National Regional Development innovative enterprise through the Plan. The Department of Community, initial stages, from concept to Gaeltacht and Rural Affairs is commercialisation. The mission responsible for overseeing the statement is to identify, incubate and administration of the LEADER network support value-added enterprise in Ireland. opportunities. www.westbic.ie

    The Irish LEADER Support Unit (ILSU) Cork BIC is a leading interdisciplinary was responsible for supporting the venture consultancy in the South LEADER groups during the most West of Ireland. The company recent funding period (2000-2006). provides an integrated process for The EU funding for the new period incubating and growing high potential (2007-2013) has not yet been technology driven companies. allocated and therefore there is www.corkbic.com

    currently no coordinating body responsible for the national network. Shannon Development is the Irish

    The Department of Community, Government's regional development Gaeltacht and Rural Affairs has, company for Ireland's Shannon however, made some funding Region (Counties Clare, Limerick and available for the interim period and North Tipperary, and South Offaly and the local action groups are responsible North Kerry) which promotes the for assessing projects that may be establishment of new and the eligible for this funding. development and expansion of

     existing industrial and internationally-In the past, the LEADER programme traded service firms. has funded projects under the following kind of themes: The BMW Regional Assembly has

    - The use of know-how and new been designated by the Government

    technologies to make the products to be the Managing Authority for the

    and services of rural areas more BMW Regional Operational

    competitive Programme and is responsible for its - Improving the quality of life in preparation and delivery. The specific

    rural areas focus will be on innovation and the - Adding value to local products knowledge economy, environment - Making the best use of natural and and risk minimisation, accessibility to

    cultural resources services of general interest

     (broadband, transport infrastructure), The focus of most LEADER initiatives increasing adaptability of workers and is on innovation and the projects must enterprises, enhancing access to have a socio-economic impact in their

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    employment, and social inclusion European Community‟s Multiannual measures. Programme for SMEs. First Step's www.bmwasembly.ie revolving loan funds are supported by

     Financial Institutions, Government, There are four Enterprise boards in European Union and Private Sector the Cork region: donations. First Step operates four

     different loan funds, in addition to Cork City (www.corkceb.ie) business support and a mentor South Cork (www.sceb.ie) covering programme. (For more see: the south Cork area www.first-step.ie) West Cork (www.wceb.ie) covering Venture Capital Investors are Bandon, Clonakilty, Timoleague, private investors who are usually keen Dunmanway, Drimoleague, to put money into start-ups with high-Skibbereen, Union Hall, Glandore, growth potential and expect a good Leap, Schull, Goleen, Ballydehob, return on their investment in the Durrus, Bantry, Castletownbere and medium term (about 2.5 times their Glengarriff as well as the Islands investment after 4 years). One of our Cork North nearest contact points here in Cork is (www.theenterpriseoffice.com) a man called Peter Bennett who is covering Charleville, Duhallow, involved in the Halo Business Angel Fermoy, Mallow and Mitchelstown Partnership. He is based in the National Software Centre, Mahon, (For more see: Cork: www.enterpriseboards.ie) 021-7304603; irelandsw@businessangels.ie In the Galway region:

    Galway County and City: (For more see: www.galwayenterprise.ie www.businessangels.ie)

     Banks

    inance and tax incentives The major banks nearly all have F specific business services which provide favourable loan conditions, overdraft facilities, invoice discounting, and other incentives such as free The Revenue Commissioners are banking which provide support for the main point of contact for people small companies that have potential wishing to avail of the Business for development, especially those who Expansion Schemes (BES) and Seed would have difficulty in raising finance Capital Schemes (SCS) that were set from traditional sources. up by the Irish government. (Enterprise Ireland has the For all kinds of information on responsibility for certifying certain financial products like loans, client companies as qualifying mortgages and credits, you can visit trades/companies in order to refer www.ifsra.ie. This is the site of the them to the Revenue Commissioners Irish Financial Services in respect of these schemes). Regulatory Authority and has been

    (www.revenue.ie) developed to protect consumers by

    helping them to make informed First Step has been appointed as a financial decisions in a safe and fair designated intermediary for the market, with sound financial Republic of Ireland to lend to micro institutions. enterprises and to avail of the European Investment Fund Micro Loan Guarantee Scheme. The loans benefit ector specific grants from a Guarantee provided by the European Investment Fund under the S

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     markets. The Export Grant covers

     50% of eligible costs, subject to a

     maximum of ?5,000 per business

    Food businesses:

     (www.irishexporters.ie)

    Bord Bia (The Irish Food Board)

    operates two marketing grant Tourism: schemes, namely the Market

    Participation Programme (MPP) and Failte Ireland is the National the Marketing Improvement Tourism Development Authority.

    Assistance Programme (MIAP). The Their Product Development area

    grants are aimed at providing provides a range of services to the

    financial support to small and Irish tourism industry in the following

    medium-sized enterprises (SMEs) to ways:

    assist them in improving their ? Support for selective capital marketing techniques and capabilities. investment in tourism product

     through grant-aid and tax (www.bordbia.ie) incentive schemes

     ? Product Quality for the BIM is the Irish State agency with accommodation sector via responsibility for developing the Irish approval and classification Sea Fishing and Aquaculture systems. industries. This agency provides a ? Providing information and range of services including advisory, advice to the tourism industry, financial, technical, marketing and Government planners to guide training supports to all sectors of the industry development and to Irish seafood industry. stimulate competitive and

     profitable tourism enterprises (www.bim.ie) ? Supplying a business

     advisory service, and Companies investing in Ireland encouraging start-ups in new

     and innovative product and IDA Ireland (www.ida.ie) is the state service areas organization with national

    responsibility for securing new (www.failteireland.ie) investment from overseas in

    manufacturing and international Culture and Arts: services sectors and for encouraging

    existing foreign enterprises in Ireland Culture Ireland is a national agency,

    established in 2005 and funded by the to expand their businesses. Under the

    National Development Plan (2000-Minister for Arts, Sport and Tourism

    2006) they are involved in the to promote and advance Irish Arts in

    distribution of grants and funding for the International context. The funds

    research & development, employment, include the granting of awards to Irish

    training and capital grants. artists or arts organisations and the

     funding and facilitation of Irish

    Exporting: participation at strategic international

    arts events. To be eligible for funding

    Dublin City Enterprise Board run there must be an element of

    an Export Marketing Initiative Fund exhibition, performance, participation

    which can be used by businesses or presentation to a wider audience

    looking to begin exporting to (e.g. presenting a paper at a

    international markets to part-fund the conference, or giving a poetry reading,

    cost of travel and subsistence, trade as opposed to attendance at an

    fair attendance/exhibiting and the event).

     creation of marketing material

    specifically designed for overseas (www.cultureireland.gov.ie)

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