Ireland vs UK: Where to Form your Company?

For many businesses, choosing whether to set up a business in Ireland or the UK is no longer simply a geographical choice. Since Brexit, changes to UK corporation tax rates, Companies House verification rules and EU market access have created a very different landscape for international founders. There are also two major factors to consider. Ireland charges 12.5% corporation tax on trading profits and the UK charges 25% above £250,000. An Irish company sells into the EU single market without customs paperwork, and a UK company doesn't. What tends to surprise people is everything underneath: Ireland is now cheaper to incorporate than the UK, both countries verify who you are before they'll register anything, and a UK-resident director doesn't satisfy Ireland's EEA director requirement.

Which is Right for you?

Your Situation	Where to Incoporate
You sell goods or digital services to EU customers	Ireland
Your trading profits will clear £250,000 and you have no strong UK tie	Ireland
Your customers, your staff and your revenue are British	UK
You need EU regulatory authorisation, or an EU establishment for GDPR	Ireland
You're building a holding company over mixed UK and EU subsidiaries	Depends on the treaty position. Take advice before you file
Both markets matter and you already trade in one	Both.

 

If you've already settled on Ireland, our guide to setting up a company in Ireland takes you through the process itself.

What You'll Pay and How Long You'll Wait

Companies House (UK) raised its fees on 1 February 2026, taking online incorporation to £100 and the confirmation statement to £50. Filing a Form A1 with the CRO (Ireland) costs €50 and the Irish annual return costs €20. This recent change has made Ireland the more affordable option in regards to costs, no only with initial but also on an ongoing basis.

The UK is faster, though it's worth understanding the various processing stages. The 24-hour turnaround starts after identity verification, and if you're overseas, verification is the part that takes the time.

On the Irish side, the CRO publishes its real processing dates every day, which is worth checking before you arrange starting dates with a bank, a landlord or a customer. In late August 2026 it was working through Fé Phráinn (priority) submissions filed about seven working days earlier, and ordinary-scheme submissions filed about twelve, against published standards of five and ten. Budget two to three weeks from instruction to certificate. Name approval, the constitution and director identity all sit ahead of the filing, and they're usually what moves the date.

CorporationTax: What 12.5% actually means for your business

Ireland runs two rates: 12.5% on trading income and 25% on non-trading income such as rent, interest and investment returns. The UK charges 25% on profits above £250,000 and 19% at or below £50,000, with marginal relief in between.

Two things qualify the tax rates.

The first only matters at scale. If your group turns over €750 million or more globally in at least two of the previous four years, you're inside Pillar Two and your effective Irish rate is 15% rather than 12.5%. Revenue counts roughly 1,600 groups with an Irish presence in that bracket, and more than 99% of companies here sit outside it. If you're incorporating your first Irish entity, this isn't your problem.

The second will matter to you. That word trading is doing day to day operations. A company that holds intellectual property, licenses it out and does little else can find its income taxed at 25%. This 25% also applies to a company whose only Irish presence is a registered office and a bank account while the people and the decisions sit somewhere else.

The 12.5% rate is a reward for running a real business in Ireland. It isn't something you acquire by incorporating here.

Our overview of Irish corporation tax sets out where Revenue draws that line, and it's worth reading before you model any savings.

Directors: UK vs Irish Requirements

Section 137 of the Companies Act 2014 requires at least one director of an Irish company to be resident in a member state of the European Economic Area. The UK left the EEA on 31 December 2020. If you live in London and you're the sole director of your new Irish company, you don't meet that requirement.

This is a large area of misunderstanding with British founders, and it's worth being clear that residency here means where you actually live, not what passport you hold. You have three ways to comply with the director requirements:

• Appoint a director who is EEA-resident.
• Put a Section 137 bond in place.
• Or, once the company is trading, apply for a certificate that it has a real and continuous link with economic activity in the State, which needs a supporting statement from Revenue and a Form B67.

Most new companies without a EEA-resident director take the Section 137 bond option. It's for €25,000, runs for a minimum of two years, has to come from a bank, building society, insurance company or credit institution in the CRO's prescribed form, and it must be in force on the day the company is incorporated. The CRO won't fast-track an application that arrives with a bond, so allow for that in your timeline. We arrange and file these as part of our Section 137 bond service.

When incorporating in the United Kingdom, UK identity verification became mandatory on 18 November 2025. Every new director and person with significant control has to verify before they can be appointed, and existing ones are working through a twelve-month transition tied to their confirmation statement date. Missing it is an offence, and until you've verified you can't be appointed or file anything.

You can verify through GOV.UK One Login if the service can read your documents, or through an Authorised Corporate Service Provider. If you're outside the UK, the ACSP route is usually the one that works. We're an ACSP, and we handle verification as part of UK company registration.

Ireland asks for the same thing by a different route. If you don't have an Irish PPS number, you file a Form VIF to get an Identified Person Number before the CRO will accept your A1, and since 30 April 2026 that declaration has to be witnessed in person. Our guide to PPS numbers and Form VIF sets out the order to do things in.

VAT and Selling into the EU

f you sell goods or digital services to customers in the EU, then the decision to form a company in Ireland vs the UK may matter more than the corporation tax rate does.

It’s crucial to understand that Irish VAT thresholds only apply to businesses established in the State. If your business isn't yet established here and you make taxable supplies, you register and account for VAT from the first one, whatever it's worth. Plenty of founders assume they have €85,000 of room before they need to think about it. This isn't the case and a late registration is an unpleasant way to start.

The customs difference is core to your decision of where to incorporate. Ship goods from a UK company to a customer in Germany and you file an export declaration; the goods then clear EU customs, with import VAT and any duty falling due on arrival. Ship the same goods from an Irish company and there's nothing at the border. Across any real volume of consumer orders, that gap compounds into carrier handling fees, slower delivery and messier returns, and it's why so many UK retailers now run an Irish entity. Our case study on exactly that move shows how it works in practice, and our IOSS registration and EU VAT registration pages cover the mechanics once the company exists.

What You'll File Every Year

Neither country is light-touch, and the running cost is closer than the incorporation fee suggests.

Ireland's late filing regime tends to move faster than the UK's. The €100 penalty lands the day after your deadline with no grace period, daily fees run from there, and Revenue has confirmed none of it is deductible. The UK's accounts penalties start at £150 and reach £1,500 past six months, doubling if you're late two years in a row. The UK is more forgiving of one bad week and less forgiving of a pattern.

There's also another reason to consider Ireland over a UK incorporation as since 16 July 2025 you only lose audit exemption if you file late more than once in a five-year period, where a single late return used to cost you the exemption for two years.

Your first Irish annual return is important to note. It's made up to the date six months after incorporation, and because no financial statements go with it there's nothing to prepare, so it slips past many company’s priorities without realising that the penalty clock starts anyway.

One more thing worth knowing before you choose an address: both countries publish the registered office on the public record and neither accepts a PO box, so a home address abroad won't work. Our guide to registered office addresses in Ireland covers your options. We handle the annual return, the RBO filing and the statutory registers through our company secretarial service, and if you'd rather file yourself, our annual return guide walks through it.

When You Need Both

If you already trade in the UK and you have EU customers, your real question usually isn't Ireland or the UK. It's whether your Irish entity should be a subsidiary of the UK company or a sister company alongside it, and whether an Irish branch would do the job instead.

A branch is cheaper to establish, but it files your parent's accounts with the CRO, which puts UK financial information on the Irish public record. It also doesn't give you an Irish tax resident company, so the 12.5% rate generally won't apply to the branch's profits in the way you might be expecting.

A subsidiary is a separate Irish company with its own tax position, its own audit position and its own filings, and it's what actually gives you EU establishment for VAT, OSS and GDPR. Our comparison of a subsidiary against a branch works through the trade-off.

Running two entities brings transfer pricing into scope, because anything moving between the UK parent and the Irish company has to be priced at arm's length and documented. That's a real cost, and it's the point at which the rate difference stops being free money. Get the structure advised before you incorporate, because turning a branch into a subsidiary later costs considerably more than choosing correctly at the start.

We incorporate in both jurisdictions which gives Nathan Trust a thorough understanding of both processes. If Ireland is the answer, our Irish company formation service covers the A1 filing, the Section 137 bond where you need one, RBO registration, tax registration with Revenue and your first annual return.

FAQs

Is it cheaper to set up a company in Ireland or the UK?

Ireland, since 1 February 2026. You'll pay €50 to incorporate and €20 for the annual return. In the UK it's £100 to incorporate online and £50 for the confirmation statement.

Can I be the sole director of an Irish company if I live in the UK?

Yes, but your company then has no EEA-resident director, so you'll need a €25,000 Section 137 bond in place on the day it's incorporated, or an EEA-resident director appointed alongside you. The UK left the EEA on 31 December 2020, so UK residency doesn't satisfy the requirement.

Is Irish corporation tax really 12.5%?

On trading income, yes. Non-trading income such as rent and investment returns is taxed at 25%, and groups turning over €750 million or more globally pay a 15% minimum effective rate under Pillar Two. If your company has no genuine trading activity in Ireland, don't assume the 12.5% rate applies to it.

Do I have to verify my identity to set up a UK company?

Yes. Since 18 November 2025 every director and person with significant control has to verify with Companies House before appointment, either through GOV.UK One Login or an Authorised Corporate Service Provider. Missing the deadline is an offence.

How long does Irish incorporation really take?

The CRO aims for five working days on the Fé Phráinn scheme and ten on the ordinary scheme, and publishes its actual position daily. In August 2026 both were running a few days behind. Plan for two to three weeks from instruction to certificate.

Do I need to register for Irish VAT if I'm under the threshold?

If your business isn't established in Ireland, there is no threshold and you register from your first taxable supply. The €42,500 and €85,000 thresholds only apply to businesses established in the State.