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Subsidiary vs. Branch in Ireland

Subsidiary vs. Branch in Ireland

Updated on Tuesday 14th February 2017

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A foreign investor interested in expanding his business in Ireland can choose from two legal options, namely a subsidiary or a branch office. The difference between them is given by the level of independency the establishment can have when discussing on the parent company. A subsidiary is a separate legal entity, subjected to taxation, while the branch office depends on the parent company. Our Irish lawyers are experienced in providing legal assistance related to the incorporation these two business forms. At the same time, our lawyers can offer advice on the main advantages provided by the two legal entities in accordance with the budget and the business plans the investors have. 
 
This chart below presents the main characteristics of a subsidiary and a branch office in Ireland.

Subsidiary-vs-branch-in-Ireland.png
 

Opening a subsidiary in Ireland 

Before investing in Ireland, a businessman should know that a subsidiary is an independent legal entity, different from the one set up in the country of origin. Investors are usually interested in this type of legal representation as the liability of the parent company can only be limited to the share capital invested in the subsidiary.  
 
The minimum requirements imposed by the Irish law system related to the establishment of a subsidiary are the following: 
 
• minimum two directors;
• one of the two has to be an Irish resident;
• the minimum share capital of the company must be 38.000 euros (38.092 euros, more exactly);
• a registered office, with a registered address in Ireland.
 
The subsidiary must register at the Tax Office for paying the corporate tax, Value Added Tax, Pay Related Social Insurance for the company’s employees and Relevant Contract Tax. Our attorneys in Ireland can offer you the legal support for opening a subsidiary here. 
 
When opening a subsidiary in Ireland, the investors can choose from one of the business entities available under the Irish commercial legislation. However, most of the companies registered in Ireland take the form of a limited liability company, which, overall, provides the most advantageous conditions for the majority of the businessmen. 
 
It is important to know that during the incorporation procedures, the investors should also draw the company’s statutory documents – the articles of association and memorandum. 
 
The procedure must be certified in front of a public notary in Ireland, who will attest that the documents are completed following the applicable legislation.  
 
Like any other company in Ireland, the subsidiary will need to be registered with the Companies Registration Office, which is the main institution regulating the activity of commercial businesses in this country. 
 

Opening a branch office in Ireland 

 
A branch office depends on the parent company and cannot take business decisions. Still, the Irish government offers incentives for foreign companies interested in opening a branch office in Ireland, by giving, for example, various tax exemptions. Our Irish lawyers can present to you more details about the benefits of opening a branch office in Ireland
 
In order to set up a branch office, an investor should submit the next documents: 
 
• a notarized stamped copy of the foreign company’s memorandum;
• a copy of the certificate of incorporation of the parent company;
• the list of directors of the parent company;
• name of the Irish resident person who is authorized on the behalf of the company;
• registered address of the Irish branch office
 
 In terms of taxation, companies established as branch offices in Ireland will be liable for paying the corporate tax only in respect to their activity conducted on the Irish territory. Also, the branch will need to register for taxation purposes, including those related to the taxation of the employees working in the respective establishment. 
 
 
 
The video below presents the main differences between Irish subsidiaries and branches:
 
 
If you are interested in expanding your business in Ireland, please contact our lawyers in Ireland, who can help you choose the best business form for your needs: either a branch or a subsidiary. Our law firm in Ireland can also offer you legal representation in the company registration process.

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