Forming a Private Limited Company in Ireland

A private company limited by shares (LTD) is the Irish entity type that almost every US or UK business uses when it puts a subsidiary into Ireland. One shareholder is enough, and that shareholder can be your foreign parent company. One director is enough, but at least one director must live in the EEA, and since Brexit, a UK-resident director no longer counts (something crucial that many companies misunderstand when expanding into the EU from Britain).

Key Facts:

What is a Private Limited Company?

The LTD is the company type created by Part 2 of the Companies Act 2014, and it replaced the old private company limited by shares that everyone incorporated before 2015. It has a separate legal personality from its members, perpetual succession, and liability capped at the amount unpaid on the shares.

Two features distinguish it from every other Irish company type.

The first is the constitution. An LTD has one document, consisting of the articles of association, in the form set out in Schedule 1 to the Act. There is no memorandum of association. Every other Irish company type still has the two-document structure where with the new LTD regulations there is no memorandum.

The second is capacity. Section 38 gives an LTD full and unlimited capacity to carry on any lawful business, which means there is no objects clause and the ultra vires doctrine doesn’t apply to it. A US or UK counterparty running diligence will ask for a certified extract of the objects, or for a capacity opinion confirming the Irish entity can enter the contract, but an Irish LTD company’s capacity is unlimited by statute, and there are no objects to certify. This is explained in section 38 and the Schedule 1 constitution.

A limited company’s membership runs from 1 to 149. A single corporate member is permitted, so your US or UK parent can hold 100% directly. An LTD can’t offer shares to the public and can’t list debt securities, which is the practical ceiling on the structure and the reason a small number of groups need a designated activity company instead.

LTD vs DAC? What's Best for International Companies

For a straightforward trading or holding subsidiary, the LTD is the best choice recommended by Nathan Trust for most instances. The DAC exists for cases where a defined purpose is a feature rather than a constraint.

There are three corporate situations would make it advisable to consider forming a DAC:

• Regulated activity, where a supervisor wants the permitted business circumscribed in the constitution.
• A joint venture, where your co-venturer wants the entity legally incapable of straying outside the agreed scope.
• Debt issuance, because an LTD can’t list securities and a DAC can.

For all other situations it is recommend to form a LTD company in Ireland. It’s worth discussing with an expert consultant at Nathan Trust and conducting due diligence if you have any concerns rather than discovering the constraint after the entity is trading.

The branch column matters more than most businesses expect. Register your US or UK company as an external company in Ireland and you have to file that company’s own financial statements on the Irish public register. Incorporate an Irish LTD and only the Irish entity’s abridged accounts go on the register.

Working with Nathan Trust

We incorporate Irish LTDs for US and UK companies, act as company secretary where the client has a sole director, arrange Section 137 bonds where no EEA-resident director is available, provide registered office addresses in Dublin and Cork, and handle the annual return and beneficial ownership filings that follow.

We offer two packages: the Standard package covers incorporation, registered office, company secretary, annual return and the UBO register with AML. The Full-Service package adds bank account setup, corporation tax registration and VAT registration.

We’ll create a personalised plan for your incorporation of an Irish limited company that streamlines the process and allows you to start trading in the shortest possible time.

The EEA-resident director requirement for Limited Companies, and how Brexit affected it

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. Many corporates initially confuse residency(residing for certain time duration per year) with nationality(holding citizenship) and the distinction can cause delays and other complications during incorporation. An Irish citizen living in Chicago does not satisfy section 137. A Bulgarian national resident in Paris does.

Since the United Kingdom left the EEA, a UK-resident director does not satisfy it either. British companies incorporating an Irish subsidiary routinely assume their existing board covers the requirement and will have their applications rejected.

A UK-resident director has not satisfied Ireland’s EEA director requirement since Brexit. British companies incorporating an Irish LTD need either an EEA-resident director, a Section 137 bond, or a Revenue certificate under section 140.

There are three compliant routes to setting up a limited company in Ireland.

1. Appoint a director who is a resident in an EEA state. Cleanest, cheapest, and it usually means recruiting or seconding someone rather than reassigning a title.
2. Take out a Section 137 bond. This is a surety giving €25,000 of cover for a two-year term, payable if the company incurs certain fines or penalties and doesn’t pay them. The €25,000 is the cover, not the actual price of the bond, which costs a fraction of that. The bond needs to be renewed every two years for as long as you have no EEA-resident director.
3. Obtain a certificate from Revenue under section 140 confirming the company has a real and continuous link with economic activity in the State of Ireland. This is the least-used route because it requires the substance to exist already, which a newly incorporated subsidiary doesn’t have.

Directors’ residency and the company’s tax residency are two different things for Limited Companies

A company incorporated in Ireland is Irish tax resident, unless a double taxation agreement treats it as resident in a treaty partner country instead. A company incorporated elsewhere is Irish resident if its central management and control is exercised in Ireland.

Revenue assesses central management and control by asking where company policy is decided, where investment decisions are made, where major contracts are defined, where the head office is, and where the majority of directors live.

In a common arrangement where this has issues is the following: An Irish LTD is incorporated. A nominee is appointed to satisfy section 137. The board’s real decisions continue to be taken in Boston or London, by the parent’s executives. The company is Irish resident by incorporation, but its central management and control is demonstrably somewhere else, and if that somewhere else is a treaty country. This creates a residence issue you didn’t intend to occur.

Appointing an Irish-resident director satisfies company law. It does not by itself make the company Irish tax resident, and it does not by itself secure the 12.5% rate.

The Tax rate similarly has to be considered. Ireland charges 12.5% on trading income and 25% on passive income. The 12.5% attaches to a trade actually carried on in Ireland: people, decisions, functions, risk. It does not attach to a registered address. A subsidiary that books revenue in Ireland while every operational decision is taken elsewhere is not obviously carrying on an Irish trade, and Revenue is entitled to investigate.

What an Irish LTD Company Must Disclose

An Irish LTD files an annual return at the Companies Registration Office with financial statements attached. A small company can file abridged statements, which means a balance sheet with notes rather than a full profit and loss account. While your turnover doesn’t appear, the balance sheet does and is available to be searched online.

An Irish LTD files abridged financial statements on a public register that can be searched by the public for a fee. International parents should assume Irish revenue and balance sheet figures will be visible to competitors.

There are two further disclosures that surprise foreign parent companies incorporating their limited company in Ireland:

1. Beneficial ownership. The Irish company has to identify the natural persons who ultimately own or control it, which means tracing through your international parent to the individuals behind it. Where no natural person holds more than 25%, the senior managing officials are recorded instead. The register isn’t fully public, but it is accessible to competent authorities and designated persons.
2. Director identity numbers. Directors filing certain CRO forms must supply an Irish PPS number or an Identified Person Number. A non-resident director with neither applies for an IPN using Form VIF, and if the declaration is made outside Ireland it has to be sworn before a notary public. You’ll need to budget two to three weeks for this and it’s a common and entirely avoidable cause of a delayed incorporation.

Limited Company Audits, Filings & the Group Trap

Small-company audit exemption requires two of three conditions in both the current and preceding financial year: turnover not exceeding €15m, balance sheet total not exceeding €7.5m, and average employees not exceeding 50.

The catch is in how the test is applied.

Audit exemption is tested against the group, not the Irish company. A subsidiary with three staff and €2m of turnover will still need an audit if its US parent meets or exceeds the thresholds.

Since 16 July 2025, under section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024, a company that files its annual return late more than once in a five-year period loses audit exemption for the following two years. This two-year penalty is expensive for a subsidiary that would otherwise be exempt.

Tax Features of a Limited Company

Three features are worth understanding as they change how you’d structure the formation of your Irish limited company.

Passive income is taxed at 25%, and close company surcharges can apply on top where undistributed investment income sits in a company controlled by five or fewer participators. A trading subsidiary with no investment income won’t meet this. A subsidiary that also holds group receivables or property might.

Since 1 January 2025, an Irish company can elect into a participation exemption for qualifying foreign distributions under section 831B of the Taxes Consolidation Act 1997. Ireland was previously one of very few OECD countries operating tax-and-credit rather than an exemption. If the plan is to use the Irish LTD as the EU holding company rather than only as a trading entity, this changes the arithmetic materially.

The research and development tax credit rate is rising to 35%, with the first-year payment threshold increasing to €87,500. Make sure you are checking the commencement date against the relevant Finance Act for your accounting period before relying on the tax credit.

Limited Company vs Branch (or Neither)

The advantage of having a branch is that it's very quick to establish. There’s no incorporation, no separate board, no company secretary.

One possible drawback of a branch is that it’s not a separate legal person, so your international parent company carries the Irish liability directly. Registering as an external company obliges you to file the foreign company’s own financial statements on the Irish public register. For a private international parent company that has never published accounts anywhere, this often is a major hurdle.

There’s an additional consideration that applies particularly to UK companies. Since Brexit, a growing set of EU rules require an entity established in the Union: product conformity and market surveillance regimes needing an EU-based responsible person, some public procurement processes, and an increasing number of large customers whose own procurement policies now require an EU contracting counterparty. Due to Brexit, a branch of a UK company is not an EU-established legal person any longer.