Uncategorized
Ireland
Foreign firms can register in Ireland as a private limited company (LTD), a branch office, or a representative office. Each structure has distinct requirements and implications, allowing businesses to choose the best fit.
1.Market overview
2.Entering the marke
3.Costs to the employer
4.Pay and taxes
5.Payroll timeline
6.Leave Policies
7.Termination Policy and severance
8.Time off during the year
9.Onboarding of employees
Market overview:
| Currency | Corporate Tax | VAT | Workforce Size |
|---|---|---|---|
| Euro | 12.5% | 23% | 2.4 million |
Entering the market:
Legal Structure: Foreign firms can register in Ireland as a private limited company (LTD), a branch office, or a representative office. Each structure has distinct requirements and implications, allowing businesses to choose the best fit.
Company Registration: Registering a company in Ireland involves selecting a unique name, providing director and shareholder details, and submitting necessary documentation to the Companies Registration Office (CRO). Online registration is available for a straightforward process.
Business Activities: Certain business activities may require specific licenses or permits based on the industry. Compliance with relevant regulations is essential, particularly for financial services, healthcare, and food-related businesses.
Taxation: Foreign companies operating in Ireland are subject to Irish taxation laws. Understanding tax implications and fulfilling tax obligations is crucial. Expert advice can help ensure compliance and optimize tax arrangements.
Employment and Visas: Hiring employees in Ireland requires compliance with employment laws and immigration rules. Work permits and visas may be necessary for foreign employees based on their nationality and job roles.
Local Representation: Some foreign firms appoint a UK-based agent or representative to handle administrative matters, especially without a physical presence in Ireland.
There are four options for registering a company:
| Name | Implications |
|---|---|
| Private Limited Company (LTD) – mainly for large firms | A private limited company is a separate legal entity with limited liability for its shareholders. It is the most common and popular structure for foreign companies in Ireland. The shareholders’ liability is limited to the amount unpaid on their shares, and the company must have at least one director and one shareholder. |
| Branch Office | A branch office is an extension of the foreign company’s parent entity. It operates as an additional place of business in Ireland but does not have a separate legal identity. The foreign company remains liable for the branch’s activities, and it must register the branch with the Irish Companies Registration Office (CRO). |
| Representative Office | A representative office is typically established for market research, promotion, or support purposes. It does not engage in commercial activities or generate revenue in Ireland. Like the branch office, the representative office is an extension of the foreign company and does not have a separate legal identity. |
| Subsidiary | A subsidiary is a separate legal entity incorporated in Ireland but wholly or partially owned by a foreign: n company. It has its own shareholders and is subject to Irish company law. A subsidiary offers more independence and protection from the parent company’s liabilities compared to a branch office. |
Costs to the employer:
As a percentage of the employee’s salary
| Cost | Amount |
|---|---|
| Employer Social Insurance Contribution (PRSI) | 10.95% if weekly earnings < EUR 3528% if weekly earnings > EUR 352 |
| Pension Schemes | 3%-5% depending on gross salary |
| Employment Levy | 0.5% on earnings up to EUR 12,659 per employee |
| Training Levy | 0.8% if employer’s total payroll exceeds EUR 3 million |
Total Estimated Cost = between 11.5% and 17.25% of base salary
Pay and taxes:
Minimum Wage: The minimum wage in Ireland is subject to different rates depending on age and experience. The minimum wage rates are as follows:
| Age | Minimum wage as of 2023 / hour |
|---|---|
| Under 18 | EUR 7.91 |
| 18 | EUR 9.04 |
| 19 | EUR 10.17 |
| 20 and above | EUR 11.30 |
Overtime: In Ireland, employees may be entitled to overtime pay depending on their employment contract and the hours worked beyond their standard working hours. Overtime pay rates can vary based on the specific employment agreement or industry standards. Employers are required to comply with applicable labour laws and collective bargaining agreements regarding overtime compensation.
Working hours: Working hours are subject to change depending on the contract, however, a normal full-time work day is set at 7,8 hours or 39 hours per week. Moreover, every employee is entitled to a 24-hour period of rest each week, or 2 such periods in a week if he/she didn’t have rest the week before (rest meaning day off).
Bonuses: Employees in Ireland are not legally entitled to receive bonuses. However, employers have the discretion to provide bonuses as incentives or rewards. Bonuses are generally considered taxable income and are subject to the prevailing income tax rates in Ireland.
Payroll timeline:
| Schedule | Date |
|---|---|
| Payroll Cycle | Monthly |
| Payroll Cut off date | 20th of the month |
| Invoice issuance date | 26th of the month |
| Payment date | Last date of the month |
Employees are to be paid by the last day of the month.
Payroll can also be weekly if an employer elects so.
Income tax: Individual income tax is progressive in Ireland as per the table below and depends on family structure:
Single, no children:
- 20% on income up to EUR 40,000
- 40% on income above EUR 40,000
Married couple where one person brings household income:
- 20% on household income up to EUR 49,000
- 40% on household income above EUR 49,000
Married couple where two people bring household income:
- 20% on household income up to EUR 80,000
- 40% on household income above EUR 80,000
Leave Policies:
| Type of Leave | Policy |
|---|---|
| Maternity Leave | Pregnant employees can take up to 39 weeks of leave, which includes 26 of ordinary leave and 13 weeks of additional leave, which is unpaid. The employer is not obliged to bear the cost of paid leave, which is fully covered by social insurance (PRSI) if an employee has fulfilled the following condition:Paid no less than 39 weeks’ worth of PRSI contributions during the year before the first day of maternity leave. Alternatively, no less than 26 weeks of PRSI is paid for two consecutive years before the first day of maternity leave. The standard maternity leave pay is EUR 262.00 per week. |
| Paternity Leave | Eligible employees are entitled to 7 weeks of paternity leave, which can be claimed within the first 6 months from the child’s birth. Employees eligible for paternity leave are:Father of the childPartner of the mother of the child Parent of a donor-concieved child |
| Shared Parental Leave | Parents can claim up to 26 weeks of unpaid parental leave. To claim the benefit an employee must have been employed for no less than one year and must provide his employer with appropriate request 6 weeks prior to the intended first day of leave. |
| Sick Leave | Every employee who has worked for at least 13 weeks before claiming sick leave is entitled to 3 fully paid sick days per year in 2023 – however, by 2026 this will be raised to 10. Sick pay is covered by the employer and may not be lower than 70% of the base salary. It must not exceed EUR 110 per day unless stated otherwise in the contract. |
Termination Policy and severance:
An employee may only be terminated for cause, unless in the probation period when he can be terminated at will.
Termination can occur:
- Voluntarily by the employee
- By mutual agreement between the employer and the employee
- By the expiration of the contract if such date is included in the employment agreement
- Termination during the probation period shall be based on the employee’s lack of suitability for the job
- Termination with notice shall be objectively justified
- Termination without notice shall only occur if the employee is guilty of a gross breach of duty or other serious branches of his contract agreement or other regulations
Notice: Regardless of which side terminates the contract, the length of notice is regulated by the length of service of the employee, as per the table below:
| Years of Service | Notice |
|---|---|
| 12 weeks – 2 years | 1 week |
| 2-5 years | 2 weeks |
| 5-10 years | 4 weeks |
| 10-15 years | 6 weeks |
| Beyond 15 years | 8 weeks |
Severance: Only full-time employees with no less than 2 years service, terminated because of redundancy are eligible for severance. In such case, severance may not be lower than 2 week’s pay per every year of service plus an additional one-time payment of one week’s pay. Moreover, the week’s pay is capped at EUR 600, unless stated otherwise in the contract.
Time off during the year
Paid: At least 20 days of paid time off are awarded to all full-time employees in Ireland. Part-time employees are aslo entitled to paid time off. It is calculated as 8% of total working hours.
Onboarding of employees:
Time:1-5 business days from the moment when the employee signs the Statement of Work – a document where his responsibilities are outlined.
Documents: Passport or ID, P-45 no longer required
Employment agreement: Every contract must be in English, and signed by both parties on paper.
