Are You Considering Moving Your business To Ireland Post-Brexit?
The United Kingdom is no longer a part of European Union Customs and single market due to the UK’s exit from the European Union on January 1, 2021.
The Department Of International Trade advised that the UK can mitigate border issues and VAT problems to register new companies within the EU. The British government recently announced that UK corporation tax will increase from 19% to 23% from 2023 onwards. This is double the 12.5% corporation tax rate in Ireland.
It may be extremely difficult for UK companies to maintain profitability and efficiency without operations in the Single Market.
Many companies find themselves in a predicament as a result of this. The completion of Brexit is a significant threat for a particular business with operations across European borders, and cross-border trade of goods has become much more troublesome with customs, regulatory checks, rules of origin and local requirements.
The challenges brought forward by Brexit have put the Republic of Ireland in a good position because of the land border with the UK via Northern Ireland. Ireland’s trade relationship with the UK has provided special provisions with the United Kingdom.
The UK has remained part of the Common Transit Convention post-Brexit. This is a crucial advantage for Irish businesses to allow exports to pass through the UK from Ireland to their final destination with reduced customs checks. Additionally, Ireland maintains the EU Free Trade agreement, allowing businesses to trade across European borders freely.
The Benefits Of Business Relocation To Ireland
Apart from the evident savings in the dramatic decrease in corporation tax – Ireland has many other factors which make it the most appealing European country to relocate to. These include:
- Low corporate tax rate of 12.5% – half of what the UK corporate tax will be in 2023.
- Ireland is the only (predominantly) English-speaking country in the EU.
- Euro currency with no exchange fees when dealing across the majority of EU countries.
- No Withholding Tax (‘WHT’) on dividends from Irish Holding Company to the EU or tax treaty countries.
- A 25% tax credit is available for research and development spend – including staff salaries and other direct R&D costs.
- Ireland is a prime country for foreign direct investment and an attractive market for businesses aiming to establish an EU presence.
- Start-ups with profits of less than €320k are exempt from corporation tax for three years.
- Ireland has 72 tax treaties and benefits directly from a further 53 EU free trade agreements globally.
- The population in Ireland is the youngest (49% of the population is under 35) in Europe and possesses a desirable skill set.
How To Set Up Business In Ireland
In order to conduct business in Ireland, ‘business permission’ must be granted by the Irish Government. This is only permissible to individuals from outside the European Economic Area (EEA).
Your business must create jobs for at least two nationals. If this is for an existing business, your investment must provide continued employment of the workforce concerned.
Employers must be very cautious when relocating their business to Ireland as employment law varies in many aspects to the UK or other EU or non-EU nations. If legislation is not complied with, employers risk employment law tribunals.
Bringing Your Employees Into Ireland
Ireland greatly encourages foreign investment, extending to employment permits and the legislation surrounding this. Depending on the employee that needs to be brought to Ireland and the purpose of the move, there are a variety of employment schemes that are available, including:
1. Intra-Company Transfer Permit
If you require key personnel to relocate to Ireland, the Intra-Company Transfer Permit is recommended. This permits the temporary placement of senior members of staff in the Irish business while remaining on the parent company’s payroll. To qualify for this permit, you must me
et the following criteria:
- The employee must be a key employee
- They must earn a salary of over €40,000
- They must be employed in a senior role
2. Critical Skills Employment Permit
This is an employment permit to encourage individuals with desired skills to enter the labour market in Ireland and become permanent residents. For your employees to be eligible for this permit, you must meet the following criteria:
- Operate an Irish registered private limited company
- Be a start-up
- Provide a job offer with a salary of over €60,000
- Provide a limited number of strategically essential occupations with a salary between €30,000 and €59,999
- The job offer you provide must be for a minimum of two years.
The list of approved occupations include:
- IT specialists
- Doctors, nurses, pharmacists
- Tax and business personnel
3. General Employment Permits
These employment permits are different from Critical Skills Employment Permits in that all occupations will be eligible to apply unless they are ineligible occupations. The list of ineligible job roles includes:
- Managers in the hospitality, leisure and healthcare services
- Pensions, human resources and sales assistants/administrators
- Construction and building professionals
- Food preparation and hospitality workers
A General Employment Permit can be granted two years initially, after which it can be renewed for a further three years.
After a total of five years of employment, the individual concerned will be able to apply for more permanent residency in Ireland.
Are you considering moving your business to Ireland to mitigate the impacts of Brexit? As a cross-border company, our team are experts in both UK and Irish employment law.