Irish company law is contained in the Companies Acts 1963 - 1990. A private company is one which by its articles:

Restricts the right to transfer its shares

Limits the number of its members to 50

Prohibits any public subscription to shares or debentures

A company is formed by submitting its Memorandum and Articles of Association to the Registrar of Companies along with the registration fee. There need to be two directors and a secretary, none of whom need be Irish. However it is normal for there to be one Irish director who can act as a local representative.

A company must have an auditor, and accounts must be filed each year with the Companies Registration Office. Small companies can prepare abbreviated accounts which do not have to include the level of turnover.

As from 1st October 1999, the Finance Act 1999 rendered all Irish incorporated companies resident, subject to certain exceptions.

For some time, limited liability companies whose ownership and control have been outside Ireland have been able, as non-resident companies, to benefit from favourable taxation conditions; the new ruling reduces the possibilities open to non-resident companies but does not remove the advantages in all cases, by any means.

A Public Limited Company (PLC), also registered under the Companies Acts 1963 - 1990, needs a minimum of seven shareholders and a minimum capital of IR£30,000, of which at least 25% must be paid up.

A PLC is not subject to the restrictions that apply to a private limited company (see above).

Partnerships fall under the Partnership Act 1890 (English legislation). Partners are individually liable for the debts of the partnership.

Partnerships do not need to file accounts or to be audited.

Limited Partnerships are formed under the Limited Partnerships Act 1907 (English legislation). They are similar to general partnerships except that they have one or more general partners with unlimited liability and one or more limited partners whose liability is limited to the amounts of their contributions. The general partners may be limited companies.

This form is not now widely used in Ireland.

The Investment Limited Partnership Act 1994 introduced this form, known as an 'ILP', which is useful for collective investment entities, having tax transparency which allows investors to obtain double tax relief, which is unavailable to unit trust investors.

There are one or more general partners, one of whom must be an Irish incorporated company with its head office in Ireland; the minimum share capital is IR£100,000 and at least two directors must be Irish. General partners must be approved by the Irish Central Bank, and there must be an Irish Custodian.

Monthly accounts must be submitted to the Central Bank.

The development of the European single market during the 1980s and 1990s, together with a consistently pro-business attitude on the part of the Irish Government has seen the emergence of Ireland as one of the fastest-growing European states, and the establishment of the International Financial Services Centre in Dublin, along with the Shannon Airport tax-free area, has led to the development of a substantial offshore business sector. This section of the site describes the main business sectors in which 'offshore' or other tax-privileged regimes are available.

The 'offshore' environment provided by the International Financial Services Centre (IFSC) in Dublin is attractive to multinationals looking to locate treasury management and other corporate financial functions in a fiscally-flexible but sophisticated environment, and many such operations have based themselves there.

Application for a certificate entitling a company to favourable tax treatment is made to the Industrial Development Agency (IDA) and the certificate is issued by the Minister of Finance.

Among the stated activities which the IFSC was set up to encourage and accommodate are a number of corporate functions, including the following:

the provision of foreign currency services for non-residents;

the carrying on of financial services for non-residents including global money management, dealing and trading in securities denominated in foreign currencies;

the provision for non-residents of services of or facilities for processing, control, accountancy, communication, clearing, settlement or information storage in relation to financial activities; and

the development or supply of software for use in the provision of services or facilities mentioned in the last item.

Companies established in the IFSC are supervised by the Central Bank (The Bank of Ireland) under the Central Bank Act 1989.

It is not necessary to establish a separate subsidiary in order to carry out corporate financial functions in the IFSC; there are agency companies and 'shared service centres' which provide certificated services to overseas client corporations for a number of the more usual corporate functions.

The Central Bank of Ireland regulates the banking industry under the Central Bank Acts 1942 to 1997, although as from 2003, the Irish Financial Services Regulatory Authority took over bank regulation from the Central Bank. The change was more apparent than real, since the new Regulator brings together many of the responsibilities previously held by the Central Bank (which continues to form a part of the Authority), the Department of Enterprise, Trade and Employment, the Office of the Director of Consumer Affairs and the Registrar of Friendly Societies.

Banks need licences from the Central Bank, unless they are already authorised in an EU member state under the Second 

Banking Directive 89/646/EEC, in which case they have to comply with certain administrative and information requirements. A non-EU bank will need to have an Irish subsidiary in order to apply for a license.

Banks qualify under the legislation setting up the International Financial Services Centre (IFSC) in Dublin, and many have taken advantage of the low tax rate (10%) offered by the IFSC. Certificates giving entitlement to the low tax rate are issued by the Ministry for Finance, and initial application is made to the Industrial Development Authority. New applications in 1999 (the last year for them) were limited under the Irish Government's agreement with the EU and the 10% tax rate will apply only until the end of 2002. From the beginning of 2003 the EU-agreed rate of 12.5% applies generally to Irish companies.

The IFSC banking sector has grown extremely rapidly in the last few years; at the end of 2000 there were some hundreds of banks or bank-like organisations operating in the IFSC, with total non-resident assets over IEP£100bn, and total resident assets only slightly lower. By mid-2002 IFSC banking assets had reached a total of 214 bn euros. This is not surprising, given that a licensed Irish bank automatically gains access to other EU countries through subsidiaries, and that the Irish IFSC tax regime is probably the best in Europe; the new 12.5% tax rate may not dent this business all that much, given the other advantages of Irish establishment, and the much-improved position under double tax treaties once 12.5% is the 'normal' Irish rate.

In the last two years, the IFSC and the Irish Central Bank have begun to admit a number of blue-chip corporate (in-house) banks, reversing a previously stance against 'non-bank' banks, although there is still a preference away from them.

The term 'offshore' is not used in Irish legislation or in describing company forms. Use of the various special regimes available in the Shannon Free Zone, the Dublin International Financial Services Centre, or through the 'Manufacturing Rate' of tax, or via a non-resident company are the main ways of achieving offshore tax treatment.

In Ireland there are no specific forms of company or other entities designed for offshore operation. There are a number of special taxation regimes offering low taxation; and non-resident companies offer a highly effective means of reducing international tax bills, although their efficacy has been reduced in some situations by the new rules introduced by the Finance Act 1999 following the Irish Government's agreement with the EU on a 12.5% mainstream corporation tax rate.

By the time that the agreed new regime is fully operational in Ireland in 2003, the various special regimes will have ceased other than for existing companies; on the other hand, the agreed new regime seems likely to be far superior to anything available elsewhere in the EU. It is difficult to see what other EU country would be brave enough to take its corporation tax rate down to 12.5%; and it is unlikely that the EU itself is going to allow an (even more harmful) tax competition to develop between member states. 

The International Financial Services Centre (IFSC) has been the successful centrepiece of the Irish Government's appeal to the international financial community in the last ten years. A wide range of financially-oriented companies, now including corporate financial service centres as well, are able to obtain a 10% rate of corporation tax and a number of other fiscal advantages by locating themselves physically in the Customs House area of Dublin's dockland, which has been extensively fitted out to be a suitable home for state-of-the-art financial businesses.

To some extent the IFSC is history, since its purpose will mostly disappear once the overall 12.5% corporation tax rate is effective in 2003, and new entrants were permitted for the last time in 1999, on a quota basis (77 more companies only!). However, it is probably still useful to give some basic details of the Centre. It was established for the following types of operation (abbreviated and summarised):

provision of foreign currency services for non-residents;

carrying on international financial activities for non-residents, including money-management, derivatives, securities dealing;

insurance;

administrative and systems support for the above.

In order to take advantage of the fiscal advantages offered by the IFSC, a certificate has to be issued by the Minister for Finance, and application is made initially to the Industrial Development Agency (it should always be borne in mind that the IFSC was established - and got its EU acceptance - through its overt role as a job creation exercise). The main advantages are as follows:

Corporation tax at 10% on trading profits;

A 10-year exemption from municipal taxes;

Double rent allowances for leased property;

100% depreciation allowances for commercial buildings, plant and machinery;

no withholding taxes on dividends or interest.

The application process is of only academic interest by now (late 2001), except perhaps in the event that an existing 10% certificate falls to be transferred to a new owner. It is not clear whether this is permitted under the agreement with the EU; perhaps, yes. There was no set format for an application, but it needed to address the business plan of the applicant, its funding, revenue and profit projections, and, importantly, the consequences for local employment. Existing IFSC companies will retain their tax privileges until the end of 2004; but new IFSC companies receiving certificates after July 1998 will pay 10% only until the end of 2002.

It is worth remarking that a number of permitted IFSC financial activities have come to be carried out by management companies, who take on the responsibilities for staffing etc that would normally have attached to the IFSC member; both parties benefit from the 10% tax rate, but the client does not have to open a separate office or even incorporate in Ireland.

Non-resident companies carrying on business in Ireland are liable to corporation tax on their Irish-sourced income only. Equivalent rules apply to capital gains; however there are roll-over exemptions available for capital gains.

For a number of years, residence has been determined primarily according to a 'management and control' test, with some subsidiary tests such as the location of actual trading, location of bank accounts, location of head office, etc. Until 1999 there was no statutory definition of 'residence', and it has been possible to maintain non-residence for an Irish company despite a substantial level of activity in Ireland.

As part of a general response to the EU's initiative against 'harmful tax competition', Ireland has installed or announced new tax regimes during 1999, agreed with the EU, which will continue the existing favourable tax regime in many respects, but which have brought some parts of the tax system much more closely into line with general EU practice.

Under the Finance Act, 1999, all Irish-incorporated companies will become resident; however, there are a number of exceptions to the rule, some of them to accommodate the situation of multinational companies (many American) who have established themselves in Ireland.

The most important exceptions are:

an Irish-incorporated company which is resident in a treaty country (Ireland has Double Tax Treaties with more than 30 countries) and which is not resident in Ireland will continue to be regarded as non-resident in Ireland;

an Irish-incorporated company which is under the ultimate control of a person or persons resident in an EU member state or in a country with which Ireland has a double tax agreement, or which is, or is related to, a company whose principal class of shares is substantially and regularly traded on a stock exchange in an EU country or a treaty country AND which carries on a trade in Ireland or is related to a company which carries on a trade in Ireland will continue to be able to be non-resident under the management and control test. ('Related to' means that either one of the two companies owns at least 50% of the other, or that both are owned at least 50% by a third company; 'Control' is interpreted within Irish rules that attribute the rights of shareholders to related parties and associates.)

Alongside these exceptions, some additional reporting requirements have been imposed on non-resident companies, and some stiffer incorporation rules have been imposed on all companies:

non-resident companies must declare their country of residence, the name and address of any qualifying trading company in Ireland, the name and address of any qualifying quoted controlling company, or else the name and address of the ultimate beneficial owners;

companies to be incorporated must intend to trade in Ireland, and will have to have at least one Irish resident director or else provide a bond.

As can probably be seen, these rules taken together are far from restrictive, and in most cases it will be possible for companies either to continue non-residence as they are currently structured, or else to make reasonably straightforward adjustments to fall within the new rules.