DOING BUSINESS IN IRELAND - Beauchamps
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
DOING BUSINESS IN IRELAND
This booklet is for general information purposes only and does not comprise advice on
any particular matter. You should not rely on any of the material in this booklet without
seeking appropriate legal or other professional advice. While every care has been taken
in preparation of this booklet, we are not liable for any inaccuracies, errors, omissions or
misleading information contained in it.
Last updated: Beauchamps July 2017
2
DOING BUSINESS
IN IRELAND
Contents
1. INTRODUCTION 5
2. IRELAND’S ATTRACTIONS AT A GLANCE 6
3. CHOOSING A BUSINESS STRUCTURE 7
4. INCORPORATING A COMPANY 8
5. IRELAND’S FAVOURABLE TAX REGIME 9
6. PERSONAL TAXES 13
7. MORE TAX INCENTIVES 14
8. INVESTMENT INCENTIVES 15
9. BANKING 16
10. INTELLECTUAL PROPERTY & DATA PROTECTION 17
11. EMPLOYMENT LAW IN IRELAND 19
12. REAL ESTATE 28
13. APPENDIX: IRELAND FACTS AND FIGURES 30
3
4
INTRODUCTION
Ireland continues to be one of the favoured global locations
for investment. A record number of investments were
secured during 2016 - rising to 244 from 213 in the previous
year. Total employment at overseas companies now stands at
199,877 people, the highest level on record.
There are over 750 overseas companies with internationally focused
operations in Ireland, many of these are the top technology,
pharmaceutical and financial services companies in the world.
Our pro-business environment, low corporate tax rates and the
availability of a young, well-educated and skilled work force have helped
us attract hundreds of foreign companies to locate here. In addition, costs
in property, rents, services and labour have fallen over the last five years
significantly increasing our cost competitiveness.
In this booklet, we look at investing in Ireland and outline some of
the benefits Ireland has as a business location. Whether considering
establishing in Ireland for the first time, expanding into Europe, or if you
already have an established European presence and are looking to future
expansion, we hope this publication serves as a valuable resource for you.
5
Ireland's attractions at a glance:
Track record Talent Innovation
• A record number of investments were • A workforce that is: young, • Some of the world’s most
secured during 2016 - rising to 244 capable, English speaking, cutting-edge companies have
from 213 in the previous year highly adaptable, educated, invested in Ireland - 5 of the
• Ireland is 1st in the world for inward flexible, productive, innovative top 10 companies on Forbes’ list
investment by quality and value and committed to achievement of The World’s Most Innovative
• Globally experienced senior Companies have Irish operations
• 1st in the world for investment
incentives management • Ireland is one of the world’s
leading Research, Development
• In the top 10 most innovative
and Innovation (RDI) locations
countries in the world
• Ireland ranked 7th out of 128
• 1st for flexibility and adaptability of
countries in the 2016 Global
people
Innovation Index
• Home to 9 of the world’s the top 10
global software companies, 10 of the Ease of doing
world’s top 10 pharma companies,
and 19 of the world’s top 25 financial business
services companies
• Consistently ranked as one of the
• Attract companies from all sectors best countries in the world to do
such as ICT, life sciences, financial business in (Forbes, 2016)
services, Internet of Things,
engineering and business services
Education
• Ireland has one of the most
educated workforces in the
World: according to the OECD
52% of 25-34 year olds have a
Tax third level qualification - 10%
Europe • 12.5% corporate tax rate,
higher than the OECD average
• Strong and diverse multilingual
• English speaking and member attractive R&D credits, beneficial skills - 17% of Ireland’s
of EU / Eurozone, with free holding company location population is international and
movement of goods and services • Attractive intellectual property over half a million (514,068
within EU and its 500 million plus regime, extensive double tax people) Irish residents speak a
consumers treaty network foreign language fluently
• Large number of cities and • Double tax treaty network • 20% increase in applicants to
towns with proven ability to STEM (Science, Technology,
attract FDI Engineering & Maths) subjects
1 Based IDA Ireland’s “Facts About Ireland - September 2016” and “Why Invest in ireland” proposition
6CHOOSING A BUSINESS may be a director).
STRUCTURE Branches
A foreign limited company which carries on business
in Ireland can establish a branch in Ireland without
Establishing a legal entity in Ireland
incorporating an Irish company subject to filing certain
Irish law caters for several types of company structures information in the Irish Companies Registration Office. The
which are easy to establish. Non-Irish nationals or non-Irish information to be filed includes copies of the company’s
residents may hold shares in an Irish company. There are, constitutional documents, accounts, details of its directors
for the most part, no minimum share capital requirements. and company secretary, and the name of the person
Incorporation can typically be achieved within five days. resident in Ireland authorised to accept service of process
on behalf of the company.
STOCK COMPANIES OR COMPANIES LIMITED BY
SHARES Representative offices
Private limited liability company A foreign company may establish a representative office in
Ireland but they should be passive and not sell or engage
There are two forms of private limited company – the in business.
model form known as an LTD and the designated activity
company (DAC) (which may also be limited by guarantee). PARTNERSHIPS
A private company can have up to 149 members. It is
possible to have a single member company and the General partnerships
LTD may have one director in which case the company General partnerships have no minimum share capital
secretary must be a separate person. The DAC must have requirement and all partners have joint and several
at least two directors and a company secretary (who liability. Although governed by the Partnership Act
may be one of the directors). The minimum share capital 1890, most partnerships will have a separate contractual
requirement is nominal. Private limited companies are the agreement reflected in a partnership agreement. There is
most popular form of business structure. a statutory prohibition on having more than 20 partners
in a partnership save in the case of partnerships of
Public limited liability company (plc)
professionals such as lawyers, accountants etc. Partnerships
More popular among large companies, a public company are generally looked through for taxation purposes.
can look to the public for finance and can trade on the
stock market. It too may have one shareholder and must Limited partnerships
have at least two directors and a company secretary (who Again they have no minimum share capital requirement.
may be a director). The minimum allotted share capital for Limited partners have limited liability but are unable to
a plc is €25,000, of which 25% must be paid up at time of participate in the management of the partnership. General
incorporation. partners who may participate in such management have
unlimited liability. A corporate can hold the position of
Companies limited by guarantee
general partner. There must be at least one general partner
These types of companies are more normally seen in not and one limited partner.
for profit ventures or sporting, charitable or representative
organisations. OTHER STRUCTURES
Unlimited companies Societas Europea (SE)
As its name suggests, the shareholders have unlimited This is a public limited company established in any EU
liability for the debts of the company. Companies with member state. Both its registered office and head office
unlimited liability may have one shareholder but must must be located in the same member state.
have at least two directors and a company secretary (who
7European Economic Interest Grouping (EEIG) Every Irish incorporated company is required to have
one EEA2 resident director unless it holds a surety bond
Irish companies may form EEIGs with other EU companies
to the value of approx. €25,000 or the Irish Revenue
in order to undertake specific activities both within and
Commissioners have certified it has a real and continuous
outside the EU. EEIGs have unlimited liability.
link with one or more economic activities in Ireland. A
Industrial and provident societies corporation is not eligible to be a director, but may be
the company secretary. A company has certain ongoing
Industrial and provident societies or cooperatives and statutory obligations, including:
friendly societies have limited liability.
• holding its first Annual General Meeting (AGM) within
eighteen months of incorporation and AGMs thereafter
at intervals of not more than fifteen months (this may be
INCORPORATING A dispensed with by LTDs and single member DACs)
COMPANY • an annual return must be filed with the CRO together
with the relevant accounts, made up to a date not more
To incorporate an Irish company, the following documents than nine months earlier than the date of the annual
have to be filed with the Irish Companies Registration return, the first Annual Return Date (ARD) is six months
Office (CRO): after the date of incorporation and each subsequent
ARD is the anniversary of the first ARD
• the company’s constitutional documents
• presenting the company’s accounts to the members of
• a Form A1 the company for consideration at the AGM
A new private limited company can be incorporated at a The requirement to file and / or audit accounts are relaxed
minimal cost within approximately five days. The minimum for smaller companies. Companies are required to keep
capital requirement for an Irish private company is nominal proper books of account.
and shares can be denominated in any currency.
2 European Economic Area, the member states of the EU plus Norway, Liechten-
stein and Iceland.
8IRELAND’S FAVOURABLE If either of these exemptions apply, then the test for
whether a company is tax resident in Ireland is whether the
TAX REGIME company carries out its central management and control
from Ireland.
Ireland has a favourable tax regime which includes a low Where an Irish incorporated company that is managed and
corporate tax rate of 12.5% for trading income, generous controlled in a treaty partner country would not otherwise
tax depreciation allowances for capital expenditure and an be regarded as resident for tax purposes in any territory
extensive tax treaty network. by virtue of the fact that the company would not a) be
resident for tax purposes in the treaty partner country
Residence because it is not incorporated in that country and b) the
The scope and remit of Irish corporation tax is largely company would not be resident in Ireland for tax purposes
dependent on the residential status of a company. Broadly because it is not managed and controlled in Ireland, then
speaking, a company that is tax resident in Ireland is the company will be regarded as resident in Ireland for tax
subject to Irish corporation tax on its worldwide income purposes.
and gains although specific exemptions do exist for certain
income such as distributions from other Irish resident Tax year
companies and patent income. Non-resident companies The tax year is aligned with the company’s accounting year
operating in Ireland through a branch are subject to Irish rather than to the calendar year.
tax on the profits of that branch and on disposals of assets
used in that branch. Rates
All companies incorporated in Ireland on or after 1 January The rates of corporation tax are 12.5% and 25%. In general,
2015 will be regarded as Irish tax resident unless the Irish the trading profits of a company are liable to the 12.5%
incorporated company is treated as tax resident elsewhere rate. Non-trading or passive profits earned by a company
by virtue of a tax treaty. A company that is incorporated in are taxed at a rate of 25%. There is no actual definition of
another country that is centrally managed and controlled what constitutes trading to be found in Irish tax statute
in Ireland will be treated as tax resident in Ireland. For although dealing in or developing land, working minerals
companies incorporated before 1 January 2015 the date and petroleum activities are expressly excluded. Guidance
for the application of this new rule will either be after 31 published by the Irish Revenue Commissioners expressly
December 2020 or the date of a change in ownership of includes development and exploitation of intellectual
the company where there has been a major change in property, investment management activities, activities
the nature or conduct of the business of the company, relating to R&D and corporate treasury functions as
whichever is earlier. constituting trading.
Any company incorporated in Ireland prior to 1 January A rate of 12.5% also applies to foreign dividends
2015 (not subject to the new rule) is treated as Irish tax repatriated from foreign traded income where certain
resident unless one of the following exemptions applies: conditions are satisfied. Credit for foreign tax suffered is
also available.
• where the company is under the ultimate control of a
person resident in any EU Member State, or in another Dividends
country which has a double tax treaty with Ireland, or
which itself is related to a company whose principal Dividends received by an Irish resident company
class of shares is regularly traded on the stock exchange from another Irish resident company are exempt from
in an EU country or treaty country, and the company corporation tax.
carries on trade in Ireland or is related to a company Dividends received by an Irish resident company that are
which carries on trade in Ireland or paid out of trading profits of a company that is resident
• the Irish incorporated company is treated as tax resident in the European Union, a tax treaty county or a company
elsewhere by virtue of a tax treaty. (or its 75% subsidiary) whose principal class of shares is
traded on a recognised stock exchange are taxed at 12.5%.
9The Finance Act 2012 extended this relief to countries with terms were agreed to before 1 July 2010). If the amount
which Ireland has ratified the OECD Convention on Mutual received in respect of a sale or transfer between connected
Administrative Assistance in Tax Matters. parties is understated or expenses overstated, and the
profits or losses of either company are chargeable to Irish
Assistance in tax matters tax as trading profits or losses, there will be an adjustment
Relief for foreign taxes suffered on the dividend may be made to substitute an arm’s length amount in each case.
available to reduce any Irish tax payable and this is usually Companies must maintain such records as would be
given by way of credit. Under foreign tax credit pooling “reasonably required” for the purposes of determining
rules, an excess tax credit arising in respect of a foreign whether the company’s trading income is correctly
dividend may be offset against the corporation tax arising computed by reference to the arm’s length principle.
on other foreign dividend income. Excess tax credits arising
There is a full exemption for small and medium enterprises.
in an accounting period may be carried forward indefinitely
for offset against corporation tax on foreign dividends in To fall within the exemption, the enterprise (including
later periods. group companies) must have less than 250 employees and
either a turnover of less than €50 million or assets of less
Interest and financing costs than €43 million (assessed annually on a group wide basis).
Interest incurred wholly and exclusively on a loan for trade
purposes will normally be deductible for tax purposes. If
Real Estate Investments Trusts (REITs)
not deductible, it may still qualify as a charge on income in Ireland has recently introduced legislation which provides
certain circumstances. There are numerous anti avoidance an exemption from corporation tax and chargeable
provisions, particularly in group situations. gains arising from rental investment property where the
property is held by a listed company and subject to a
Carry forward of losses number of conditions- for example 85% of the income
Trading losses incurred by a company can be offset against must be distributed to shareholders annually. Income
other profits of the same or the preceding accounting and gains are generally tax neutral within the company
period. Trading losses can be carried forward indefinitely to and are not subject to tax until paid out in the form of
be offset against future trading profits that a company may dividends. Accordingly the double layer of taxation that
earn provided that within a three year period there has not would normally arise when property is held by a corporate
been a change in ownership of the company and a major is eliminated.
change in the nature or conduct of the trade. Where a
company has other profits, which may include investment
Capital gains tax
and rental income and certain capital gains, there is An Irish resident company is subject to Irish capital gains
provision for the losses from trading activities to be offset tax on its worldwide gains. The rate is 33% with respect to
on an after-tax basis. disposals made on or after 6 December 2012. The gain is
effectively calculated as the excess of the sale or deemed
Where a company has related companies that are tax
sale price over the cost, foreign exchange rate movements
resident in Ireland, and where certain criteria are met, a
and pre 2003 indexation.
loss that is incurred by one company can be offset against
profits of the other company. The recipient company can Disposals by Irish resident companies from substantial
use these surrendered losses to reduce its own taxable shareholdings (at least 5%) in trading subsidiaries tax
income for the period. resident in an EU or tax treaty country are exempt, in most
cases, from capital gains tax. In group situations, holdings
Transfer pricing of other members of the group are taken into account in
Ireland introduced legislation which will align it with determining whether the minimum holding requirement
international standards by adopting the OECD principles. is met.
These provisions take effect for accounting periods
commencing on or after 1 January 2011 (subject to certain
grandfathering provisions for arrangements where the
1011
Deposit Interest Retention Tax (DIRT) with the Irish Revenue and follow the procedures for the
deduction at source of employees’ income tax, known
The rate of retention tax that applies to deposit interest,
as Pay As You Earn (PAYE), Universal Social Charge (USC)
together with the rates of exit tax that apply to life
and Social Insurance (PRSI) contributions. Companies
assurance policies and investment funds, is 41%. The rate
are required to operate this on both cash payments and
applies to payments made on or after 1 January 2014 and
benefits in kind and it applies whether the employment
is deducted at source by banks and other deposit takers on
is an Irish employment or a foreign employment. Since 1
certain deposits.
January 2011, certain equity based compensation has also
Withholding taxes to be processed through the PAYE system.
Dividend withholding tax at the standard income tax Value added tax
rate (currently 20%) applies to dividends and other profit
Ireland has a sales or value added tax (VAT) system based
distributions made by Irish resident companies. Generally
on the EU Sixth Directive.
speaking, such payments, when made to persons resident
in EU Member States (apart from Ireland), or in countries This is levied on most goods and services and on most
with which Ireland has a tax treaty, or when made to Irish goods imported into Ireland from outside the EU.
resident companies, or companies resident in the EU or The standard rate of VAT is 23%, with lower rates of
a double tax treaty country, or non-resident companies 13.5% (for buildings and household fuels), 5% (flat rate to
controlled by EU (other than Irish), or treaty country farmers), 4.8% (livestock) and zero (food, drink and certain
residents, or non-resident companies wholly owned by other goods) rates applicable to certain supplies of goods
companies quoted in an EU, or treaty country are exempt and services. A rate of 9% applies to certain restaurant,
from the withholding, subject to compliance with certain hotel and leisure and other tourism services. Banking,
formalities. financial services and insurance are exempt.
Income tax must be deducted at the standard rate The VAT is calculated on the euro value of the consideration
(currently 20%) on certain payments, to include interest and declared and paid to Irish Revenue through periodic
and patent royalties. An exemption may be available under returns.
domestic legislation from Irish withholding tax where
interest is paid by a company in the ordinary course of its Stamp duty
trade or business to non-resident companies who are EU
Stamp duty arises on certain instruments including those
residents or residents of double tax treaty countries and
transferring ownership in property or shares. The rate
that country imposes a tax that generally applies to interest
on share transfers is 1% of the purchase price or value,
received from outside that territory.
residential property rates are 1% to 2% depending on
Under the Interest and Royalties Directive, interest price, and the rate on transfers of commercial property and
and royalty payments by an Irish resident company to business goodwill is 2%. Transfers of shares listed on the
associated companies may be paid without the obligation Enterprises Securities Market will be exempt. Relief also
to withholding tax subject to the conditions set out in the applies to transfers between associated companies and in
Directive. certain re-organisations.
Tax treaty network There is no stamp or capital duty on the issue of shares or
loan capital. Shares in a non-Irish company are normally
Ireland has concluded tax treaties with 72 countries, of (but not always) exempt from this charge. An assignment
which 70 are in effect. Different rates of withholding tax of loan capital can, on satisfaction of certain pre-
can apply to interest, dividends and royalties, depending conditions, be assigned without attracting a stamp duty
on the terms of the particular treaty. charge.
It has concluded Tax Information Exchange Agreements
with 25 countries, 20 of which are in force. Property Taxes
A property tax known as “rates” applies to commercial
Payroll properties and is payable annually. Private residences and
A company which engages employees must register agricultural holdings are exempt from rates. Rates are
12based on the rateable valuation of land and buildings as one spouse or both spouses are earning income. These
determined by the relevant local authority. Ireland has just taxes are either deducted by employers under the PAYE
introduced an annual residential Local Property Tax (LPT). system or collected via a self-assessment System.
The rate of LPT will be 0.18% for properties up to a market
In addition to income tax, employees are also obliged to
value of €1million. Residential properties valued over €1
pay PRSI and USC.
million will be assessed at the actual value at 0.18% on the
first €1million in value and 0.25% on the portion of the Capital gains tax
value above €1 million.
Irish resident individuals are liable to capital gains tax of
33% on their worldwide gains.
PERSONAL TAXES There are a number of notable exceptions and reliefs
available including an individual’s principal private
residence, tangible moveable assets with a life of less than
Income tax 50 years and retirement relief.
Individuals resident, ordinarily resident and domiciled in Persons who are not resident in Ireland are liable to Irish
Ireland are liable to Irish income tax on their worldwide capital gains tax on the disposal of certain specified assets
income. such as Irish land or buildings, Irish mineral or exploration
rights, assets used for a branch activity conducted in
An Irish resident and domiciled but not ordinarily resident
Ireland, or unquoted shares which derive their value or a
individual is also liable to Irish income tax on their
greater part of their value from Irish land or buildings or
worldwide income.
exploration / exploitation rights.
Non Irish domiciled individuals who are resident in Ireland
In general, capital losses can be offset against capital gains
are liable to Irish income tax on Irish source income, foreign
arising in the same year or carried forward.
employment income to the extent that the duties are
exercised in Ireland and foreign income to the extent it is Pay Related Social Insurance (PRSI) and
remitted to Ireland. Universal Social Charge (USC)
A person will be deemed to be tax resident in Ireland if PRSI is a payroll tax, based on earnings, which funds
they spend: various State benefits including unemployment assistance,
• a total of 183 days (any part of a day) in Ireland in any retirement pensions, and certain medical benefits.
tax year or Both employees and employers are obliged to make PRSI
• a combined total of 280 days (any part of a day) over contributions. Employees pay 4% of total earnings in the
two consecutive tax years (assuming a minimum of 30 form of this social security contribution.
days in each tax year) An employer is obliged to pay 10.75% of each employee’s
If a person is resident in Ireland for three consecutive years, remuneration.
they will become ordinarily resident for tax purposes. There is also a USC which is payable on income at the
A person’s domicile is, initially at least, their domicile following rates:
of origin but you can prove you have abandoned your • The first €12,012 - 1%
domicile of origin and acquired a new domicile known as a
• The next €6,656 - 3%
domicile of choice.
• The next €51,3765 - 5%
The Irish income tax system is progressive and there are
two rates. The current standard rate of income tax is 20% • The remainder - 8%
and the higher or marginal rate is 40%. The 20% rate is
USC at a rate of 11% is payable on non PAYE income in
available in respect of the first €33,800 of income of a
excess of €100,000.
single person. Higher bands are available for married
couples but the actual bands are determined by whether
13MORE TAX INCENTIVES Intellectual Property (IP) regime
Ireland’s IP regime combined with the tax incentives
already outlined make Ireland an attractive location for
Holding Company Regime establishing an IP holding company to effectively manage
Irish tax legislation provides: and exploit IP.
• a participation exemption whereby capital gains which Research and Development tax credits
are made by a company (the “investor company”) on the
qualifying disposal of a substantial shareholding in a In addition to allowing a tax deduction in computing
subsidiary (the “investee company”) are exempt from tax trading income, Ireland also provides a tax credit of 25%
of capital and revenue expenditure (including, to a certain
• a 12.5% corporation tax rate on foreign dividends extent, sub-contracted R&D spend) on qualifying research
repatriated from foreign traded income where certain and development expenditure.
conditions are satisfied
Consequently the effective value of the tax deduction and
• no cfc rules for foreign income tax credit is 37.5%. The credit may be used in a variety of
• no relevant thin capitalisation ways, including to reward key employees by effectively
giving them the benefit of credit.
• onshore pooling of tax credits for certain foreign
interest, branch profits and dividends; effectively this R&D tax credit claims must be made within 12 months of
means that it will be usually possible to eliminate any the end of the accounting period in which the expenditure
Irish tax cost on the repatriation of profits to Ireland and is incurred.
• extensive treaty network
14Knowledge development box noted:
From 1 January 2016, Irish registered companies that • This relief applies to employees assigned to work in
generate profits as a result of qualifying research and Ireland for a minimum period of 12 months and can be
development activities on certain intellectual property availed of for a maximum period of five years
assets including copyrighted software and patented • Assignees arriving in 2012 to 2017 are eligible
inventions qualify for an effective corporation tax rate of
6.25% which is half the usual rate. • New hires are not eligible – the employee must have
been a full time employee of a company incorporated
IP – depreciation and resident in a Double Tax Treaty
Tax depreciation is available on a broad range of IP • Country and must have exercised the duties for that
assets. Companies carrying on a trade can claim this tax employer outside Ireland for the 6 months prior to
depreciation on the capital cost of acquiring qualifying arrival in Ireland. In addition, the individual must not
intellectual assets over the qualifying life of the asset or 15 have been tax resident in Ireland for the 5 tax years
years. preceding the year of arrival (Irish domiciles / citizens
are not excluded)
Companies can effectively write capital expenditure
off against the income streams that the expenditure Irish Employees going abroad - Foreign Earning
generates. Deduction (FED)
There is no claw back of the relief granted if the intangible The FED scheme is designed to assist companies seeking
asset is retained for at least five years. to expand into certain specified relevant countries. Where
the relief applied, a portion of the individual’s employment
Stamp duty
income (up to a maximum of €35,000) is exempt from Irish
There is no stamp duty on the transfer of certain IP assets. tax. To qualify for the relief, the individual must have at
Allowance for expenditure on scientific research. least 40 “qualifying days” in the year – a “qualifying day” for
this purpose is one of at least three consecutive days which
A company carrying on an Irish trade that incurs the individual is present in one of the relevant countries
expenditure on capital equipment for research purposes for the performance of employment duties. The relief will
qualifies for 100% capital allowances. operate for the tax years of assessment from 2012 to 2017.
The Irish Collective Asset-management Vehicle
(ICAV)
Legislation providing for the establishment of the ICAV INVESTMENT
was introduced in Ireland in 2015. An ICAV is a new and
flexible corporate fund structure which is not subject to
INCENTIVES
Irish company law but is governed by bespoke new ICAV
Generous fiscal incentives are available to foreign
legislation. An ICAV operates as a corporate vehicle which
companies looking to invest in Ireland.
is fully exempt from Irish tax on income and profits and
may be particularly attractive to US investors as it should These packages are flexible and vary from project to
be entitled to “check the box” to elect to be a designated project. The primary grant aids available are as follows:
entity for US domestic tax purposes. • capital grants contributing towards the cost of fixed
assets, including: site purchase and development,
Executives coming to Ireland - Special Assignee buildings and new plant and equipment
Relief Programme (SARP)
• where a factory building is rented, a grant towards
The SARP targets the assignment of key foreign based
the reduction of the annual rental payments may be
individuals to their Irish based operations. The relief
available instead
operates by exempting from income tax 30% of qualifying
employment income in excess of €75,000. It should be • employment grants to companies which will create
15jobs. Normally, one half is paid on certification that the
job has been created and the balance one year later, BANKING
provided the job still exists
The Central Bank of Ireland is responsible for banking and
• training grants to cover the full cost of certain training
financial regulation. As Ireland is a member of the euro
initiatives. Covered costs include trainees’ wages,
zone, some central bank functions are shared with other
travel and subsistence expenses and engagement of
members of the European System of Central Banks.
instructors, consultants to train
The two main Irish banks are Allied Irish Banks plc and Bank
• research and development grants in respect of
of Ireland. RBS / Ulster Bank, HSBC, KBC and Barclays also
approved research and development work, including
have a retail and / or business presence in Ireland.
product and process development, feasibility studies
and technology acquisitions Opening a bank account in Ireland
In addition Enterprise Ireland has a significant support Residents and non residents may hold both euro and
packages for entrepreneurs and start-ups. foreign currency accounts in Ireland and abroad. Electronic
banking is widespread.
16Financial products Trade Marks Act 1996 (as amended), which implements
European legislation aimed at harmonising trade mark law
Payments can be settled via domestic interbank payment
throughout the EU. It is possible to register a trade mark
systems and pan European clearing systems. Some allow
which would only have effect in Ireland. Trade marks which
for settlement in real time, others on a same or next day
are granted are registered for ten years and are renewable
basis. Cheques are still used particularly by small and
indefinitely for successive periods of ten years subject
medium size firms but their use is declining and there are
to the applicable legislation. Under EU trade mark law it
plans to phase out cheques by 2018.
is also possible to apply for European Union Trade Mark
Use of electronic credit transfers is growing and is almost protection, which, if granted, gives protection in every EU
used across the board for payroll payments. Paper based country, with a single application. Ireland has also ratified
credit transfers are also popular. the Madrid Protocol, which provides for international trade
Debit and credit cards are wide spread and most are based mark registration.
on chip and pin technology.
Patents
As one would expect, Irish based banks offer sophisticated
The Irish patent system is governed by the Patents
financing products including overdraft, lines of credit, term
Act 1992 and there are two types of patent protection
loans, invoice discounting, factoring, leasing, structured
available:
finance, letters of credit, commercial paper and bonds.
• a full-term patent
• a short-term patent
INTELLECTUAL The full-term patent lasts for 20 years from the date of
PROPERTY & DATA filing, provided that annual renewal fees are paid and the
patent is not revoked at any stage. The term of a patent can
PROTECTION be extended via a supplementary protection certificate for
a maximum of five years where the patent is for a medicinal
Copyright, trade marks, patents, designs and ancillary product for human or animal use or for plant production.
rights such as confidential information are all capable of The short-term patent lasts for ten years and as with full-
being protected in Ireland. term patents supplementary protection certificates may be
obtained.
Copyright Ireland is also a member of the European Patent
The Copyright and Related Rights Act 2000 transposed Organisation and has ratified the Patent Co-Operation
certain EU directives into Irish law and provides protection Treaty. When granted, a European Patent has the effect
for specific works such as computer programs and original of a national patent in each of the countries designated.
databases as well as literary, dramatic, musical and artistic A European Patent designating Ireland has the effect as
works during the lifetime of the author and for 70 years if it were a full-term patent granted by the Irish Patent
thereafter. Office and a single international application allows for the
designation of some or all the contracting countries.
Another form of database right dealt with in the Act gives
rights to the creators of a database where there has been Designs
substantial investment in obtaining, verifying or presenting
the contents of the database (irrespective of whether the The Industrial Designs Act 2001 is the main legislation in
database is a copyright work). The database right expires Ireland governing design rights. The Act provides that a
15 years from the end of the calendar year in which the design must be new and have individual character to be
making of the database was completed. registrable and a registered design is capable of being
protected for a maximum period of up to 25 years.
Trade marks It is also possible to apply for European Union design
Trade marks are protected under common law by way protection which gives protection in every EU country.
of action for passing off and also under statute by the
17In addition there is an unregistered design right which lasts E-commerce and consumer protection
for three years from the date in which the design is first
Ireland has implemented the Electronic Commerce
made available to the public within the European Union.
Directive which applies to almost all organisations who
Confidential information offer commercial services to customers online. The
legislation addresses and legitimises electronic contracts
Other than the indirect protection afforded by data and signatures. It provides that certain information must
protection legislation, there is no statutory protection for be provided by an online service provider in a manner
confidential information and trade secrets in Ireland at which is easily, directly and permanently accessible to
the time of writing. However, confidential information and recipients of a service.
trade secrets can be protected by contractual provision or
by and action in common law. There is a range of legislation that provides protection
to consumers when concluding contacts online. For
A European Directive on the protection of trade secrets example, the European Union (Consumer Information,
is proposed which seeks to harmonise the protection of Cancellation and Other Rights) Regulations 2013 (SI 484 of
trade secrets across the European Union against unlawful 2013) provides that before a binding contract for distance
acquisition, disclosure and usage. Once adopted, Member selling can be entered into, a trader must supply certain
States will have to implement the Directive into national information to a consumer (including the price of the
law. goods, taxes and delivery costs). It also gives consumers
18the right to cancel a distance contract. In addition, under
the European Union (Alternative Dispute Resolution for EMPLOYMENT LAW IN
Consumer Disputes) Regulations 2015 (SI 343 of 2015),
businesses established in Ireland that have committed
IRELAND
to or are obliged to use an alternative dispute resolution Employment law in Ireland is largely based on EU law.
(ADR) entity to resolve disputes with consumers, must
provide consumers with details of the relevant ADR entity. The basics – what are the obligations of
This information must be provided in a clear, employers in Ireland?
comprehensible and easily accessible way on its website • Employees must be given a written statement of details
and if applicable, in its general terms and conditions of their contract within two months of commencing
or contracts. Also, under EU Regulation No. 524/2013, employment (eg, salary and deductions, job title or
businesses must provide an easily accessible link to the nature of the work, hours of work and overtime, sick pay,
European Commission’s on-line dispute resolution platform holidays etc)
on their websites.
• The national minimum wage rate for an experienced
It is important to have appropriately drafted terms adult is €9.25 per hour. An “experienced adult” under the
and conditions dealing with the requirements of the National Minimum Wage Act 2000 is an employee who
e-commerce and consumer legislation. is over 18 years of age and is in employment of any kind
for any two years over the age of 18. Employers are not
Data protection legally obliged to pay sick leave
The Data Protection Acts 1988 and 2003 (the Acts) govern • Employers should establish certain policies and
data protection in Ireland but when the EU General Data procedures - including disciplinary, grievance and
Protection Regulation comes into force on 25 May 2018, it dignity at work (including bullying and harassment,)
will standardise the current data protection laws across the data protection, absenteeism policies
European Union.
The Acts specify the data protection principles which must Working time
be complied with when personal data is being processed. Employees are entitled to a minimum of 20 days annual
Different provisions apply depending on whether the holidays, in addition to nine statutory public holidays.
personal data being processed is classed as sensitive or
The maximum average working week for many employees
non-sensitive data.
cannot exceed 48 hours (subject to certain exceptions)
Duties of data controllers and data processors are also set and employers must keep written records of employees
out in the Acts. The Acts confer certain rights on individuals working hours and rest breaks.
including: the right to be informed of data being kept;
Employees are entitled to a daily rest break of 11
the right to prevent the use of personal details; the right
consecutive hours and a weekly rest break of 24 hours.
to have ones name removed from a direct marketing list;
the right to access personal data and the right to rectify or Employees aged 18 and over are entitled to a rest break,
remove details. paid or unpaid, of an uninterrupted period of 15 minutes
after working for a period of four and a half hours, or a
There are restrictions on the transfer of personal data by to
rest break of 30 minutes after six hours have been worked,
a country outside of the European Economic Area. Such a
which may include the 15 minute break above. Where
transfer may not take place unless that particular country
applicable, breaks are to be spent away from workstations.
or territory ensures an adequate level of protection for the
privacy of its data subjects in relation to the processing If not already included in the rate of pay, employees are
of personal data. It is possible to transfer data to an generally entitled to a premium payment for Sunday
“unapproved” state provided binding corporate rules or an working or paid time off in lieu. The employment contract
EU approved model contract is put in place. should expressly state whether or not the rate of pay is
inclusive of a Sunday premium.
19Termination of employment Maternity and protective leave
There are minimum notice periods for termination of Female employees are entitled to up to 42 weeks maternity
contracts of employment in the absence of employee leave in Ireland. The employee is entitled to a pay-related
misconduct. The duration of notice is dictated by the maternity allowance from the Government during the first
employee’s period of continued service and varies from 26 weeks of maternity leave and there is no obligation
one week’s notice to eight weeks’ notice. on the employer to pay remuneration at any time during
leave. There is a general right to return to work after
Employees who have been employed by an employer for
maternity leave.
more than one year are generally protected from being
unfairly dismissed unless the employer can establish that Employees are also entitled to adoptive leave on a similar
there were substantial grounds justifying the dismissal basis.
such as the employee’s conduct or redundancy (subject
Male employees are entitled to up to 14 weeks unpaid
to fair selection). Fair procedures must also be followed in
parental leave and a right to return to work after such
completing the termination.
leave.
While the employee may be awarded compensation up
Carer’s leave allows an employee to leave their
to a maximum of two years salary and / or reinstatement
employment temporarily to provide full time care for a
under the Unfair Dismissals acts 1997 (as amended), in
person who is in need of such care. An employee is entitled
practice, awards are often made and termination packages
to a maximum of 104 weeks leave in respect of any one
agreed below this level.
care recipient. The minimum statutory entitlement is
In certain cases an employee could seek to apply for a High 13 weeks. The employee must have at least 12 months
Court injunction preventing any dismissal from taking continuous service with the employer before the
effect. commencement of leave. There is no right to remuneration
or superannuation benefits while on carer’s leave.
In the case of the transfer of a business, all accrued
employee rights (except certain pension rights) With effect from the 1 September 2016, new parents (other
automatically transfer to a new employer so that dismissal than the mother of the child) are entitled to paternity leave
due to such transfer is usually regarded as unfair. from employment following the birth or adoption of a
child. The parent is entitled to statutory paternity leave for
Redundancy two weeks which can be taken any time during the first
Even where a redundancy may be justified, an employer six months following the birth or adoption placement.
must not unfairly select employees to be made redundant Employers are not obliged to pay employees who are
and the selection must be justified by objective criteria. on paternity leave, however, employees may qualify for
paternity benefit from the Department of Social Protection.
Employees who have worked for at least two years for an
organisation are entitled to a statutory redundancy lump Employment equality
sum when made redundant.
Employers should be aware of the Employment Equality
The level of the statutory redundancy payment is based on Acts 1998 and 2004 which prohibits discrimination on
the pay of the employee. nine grounds. The grounds are: gender, marital status,
Eligible employees are entitled to: family status, sexual orientation, religion, age, disability,
race / colour / nationality / ethnic or national origins and
• Two weeks’ pay for every year of service over the age of
membership of the traveller community. The Act prohibits
16
discrimination in employment and deals in particular with
• One further weeks’ pay access to employment, conditions of employment, training
or experience for or in relation to employment, promotion
The amount of the statutory redundancy payment is
or re-grading or classification of posts.
subject to a maximum earning limit of €600 per week
(€31,200 per year).
20The Protected Disclosures Act 2014
The Protected Disclosures Act 2014 is in place to protect
whistleblowers. Under the Act, employers are prohibited
from penalising employees who disclose relevant
information which they reasonably believe shows one or
more “relevant wrongdoings” have taken place in their
place of work.
The Act defines a number of “relevant wrongdoings”
including: committing an offence, a threat to the health
and safety of an individual, a miscarriage of justice, failing
to comply with a legal obligation other than one arising
under the workers contract of employment; damage to
the environment, unlawful or improper use of public funds
or resources or an act or omission by a public body that is
oppressive, discriminatory or grossly negligent.
Where an employer is found to have penalised an
employee for making a protected disclosure, the employee
may be awarded compensation of up to five years’ salary.
Employment permits
In order to work in Ireland a non-EEA National, unless they
are exempted, must hold a valid employment permit. In
2016, the Department of Jobs, Enterprise and Innovation
launched the employment permits online system with the
aim of establishing faster turn-around times and facilitating
easier online submission of supporting documents. The
Department has published a very helpful user guide on its
website.
The main forms of permit are still the same - namely
the Critical Skills Permit, the Intra-Company Transfer
Employment Permit, the General Employment Permit and
the Contract for Services Permit. There are also other forms
of permit for specific situations. Applying for the most
appropriate form of permit should be carefully reviewed at
the outset to reduce the risk of refusal and time delays.
In the following pages we outline the key details of the
main types of employment permits.
21Permit Duration Application Fee Eligibility / Requirements
General Two years but An application fee of €500 • Minimum annual remuneration is generally €30,000
may be renewed is required for permits (remuneration includes salary and health insurance)
Employ-
for a further three of up to six months in (there are certain exceptions)
ment
years duration. An application
• Non EEA students who have graduated in the last 12
Permit fee of €1,000 is required
months from an Irish third level institution and have
for permits of up to two
been offered a graduate position from the Highly
years duration.
Skilled Occupations List may apply
• Non EEA students who have graduated in the last
12 months from an overseas third level institution
and have been offered a graduate position as an ICT
professional from the Highly Skilled Occupations List
may apply
• Applications may be for specialist language support
and technical or sales support with a fluency in a non-
EEA language for companies who are getting support
from the State enterprise development agencies
• The individual must be directly employed and paid by
the employer
• The employer must be trading in Ireland, registered
with Revenue and with the Companies Registration
Office
• A permit will only be issued to companies where the
granting of a permit would not mean that more than
50% of the employees would be non EEA nationals
• New applications must include evidence that a labour
market needs test has been carried out meaning that
that vacancy must have been advertised with the
Department of Social Protection employment services
/ EURES employment network for two weeks and in
a national newspaper for at least three days and in
either a local newspaper or jobs website for three
days
• Employment permits are not available for occupations
listed under the heading “Ineligible Employment” on
the Ineligible Categories of Employment list
• Where an employee is on their first employment
permit, they are expected to stay with the new
employer for 12 months (apart from in exceptional
circumstances). After that, the employee may move to
a new employer provided that a new application for a
General Employment Permit is made for a similar job
or to another eligible employment sector
22Permit Duration Application Fee Eligibility / Requirements
Critical This permit is The fee for a Critical Skills There are 2 categories of eligible occupations for a
Skills Em- issued for two Employment Permit is Critical Skills Employment Permit:
ployment years and the €1,000. If the application
1. Jobs with an annual salary of €60,000 or more
Permit employee is not is refused or withdrawn,
– occupations other than certain ineligible job
required to renew 90% of the fee will be
categories and those which are contrary to the public
it. Instead the refunded to the applicant.
interest
employee may,
on the expiry 2. Jobs with annual salaries of €30,000 or more –
of this permit the occupation must be on the Highly Skilled
type, apply to Occupations List
his or her local • The employee must have a job offer from a company
immigration or employer who is registered with Revenue,
office for a Stamp trading in Ireland and trading with the Companies
for permission to Registration Office
live and work in
• The employee must be directly employed and paid by
Ireland without
the employer in Ireland
an employment
permit. • The job offer must be for two years or more
• A labour market needs test is not required
• The employee must have the relevant qualifications,
skills and experience required for the job
• For jobs in the €30,000 or more salary range, the
employee must have a degree qualification or higher
• For jobs with an annual salary of €60,000 or more,
the employee must have a degree or equivalent
experience
• The employee is expected to remain with the
employer for 12 months (except in exceptional
circumstances). After that, the employee may change
employer provided that he or she has made a new
application for a Critical Skills Employment Permit
23Permit Duration Application Fee Eligibility / Requirements
Dependent / This permit There is no fee for • This type of permit applies only to spouses, partners
is usually Dependent / Partner/ or dependents legally resident in Ireland. Applications
Partner/
issued for the Spouse Employment for this type of permit must go through the normal
Spouse period up to Permit applications or employment permit procedures
Employment the expiry renewals.
• In order to be eligible, the applicant and the
Permit date of the
employment permit holder must be married, in
Garda National
a recognised partnership or in a civil partnership.
Immigration
A dependent must be a family member who is
Bureau
unmarried and aged under 18 years. The employment
registration
permit holder must have either a valid Critical Skills
card of the
Employment Permit, a valid Green Card permit or a
employment
valid employment permit or hosting agreement in
permit holder.
respect of a researcher position. The employment
permit holder must also still be working within the
terms of his or her permit
• Someone on a Dependent / Partner / Spouse
Employment Permit is expected to stay with the
original employer for 12 months unless there are
exceptional circumstances. After that it is possible
to change job once an application for a Dependent /
Partner / Spouse Employment Permit is made
• The applicant must have a job offer and must have
the qualifications, skills and experience required for
the job
• They must be paid directly by the employer and paid
by their employer in Ireland
• The applicant may work for a minimum of ten hours
per week
• The remuneration can be less that €30,000 per year
however they must be paid at least the national
minimum wage
• The employer must be trading in Ireland, registered
with the Revenue and with the Companies
Registration Office
24Permit Duration Application Fee Eligibility / Requirements
Atypical Up to 90 days An application fee of • A non EEA national may qualify for this Scheme if
Working €250 is required under they are required by an Irish based company to work
Scheme the Scheme. where:
-- A shortage of skills has been identified
-- They are required to provide a specialised or
high skill to an industry, business or academic
institution
-- They are a paid or funded short term employee
or intern. This applies to students studying on an
approved third level course outside Ireland where
the Irish employment or internship is part of the
course
-- They will work as a locum doctor employed and
paid by an agency
-- They will work as a nurse or midwife on the RCSI
Clinical Adaptation and Assessment Programme
• A letter of confirmation from the Irish based host
organisation and a copy of biographical page of
the Applicant’s Passport must be included with the
application
• The employee must apply for the Scheme from
outside Ireland and must not travel to Ireland until
they have an Atypical Working Scheme Letter of
Approval
25Permit Duration Application Fee Eligibility/ Requirements
Intra- The duration The fee for a new • This permit is designed to facilitate the transfer of
Company of an Intra Intra-Company Transfer senior management, key personnel or trainees who
Transfer Company Employment Permit, are non-EEA nationals from an overseas branch of a
Employment Transfer Permit which must be paid by multinational corporation to its Irish branch
Permit would be for a the connected person,
• Intra-Company Transfer Employment Permits are
defined period is:
strictly limited to the following eligible positions:
depending
• €500 for an
on the reason • Senior management earning a minimum annual
Employment Permit
for transfer. remuneration of €40,000
of 6 months or less
Applications • Key personnel earning a minimum annual
duration or
may be remuneration of €40,000 or
granted for • €1,000 for an
Employment Permit • Personnel undergoing a training programme
a maximum
from 6 months up to earning a minimum annual remuneration of
period of up
24 months duration €30,000
to 24 months
in the first The fee for a renewal • The senior manager or key personnel must have
instance of an Intra-Company been working for a minimum of 6 months with
and may be Transfer Employment the overseas company prior to transfer in order to
extended Permit is: support the contention that the person is integral to
upon the organisation
• €500 for an
application to
Employment Permit • If the application is in respect of Training the foreign
a maximum
of 6 months or less national must have been working for the Foreign
stay of five
duration Employer for a minimum period of 1 month prior to
years.
the transfer
• €1,000 for an
Employment Permit
from 6 months up to
24 months duration
• €1,500 - for an
Employment Permit
from six months,
up to 36 months
duration
If an application is
unsuccessful then
90% of the fee will be
refunded.
26You can also read
