Setting up a limited company in Ireland (2025)
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Posted: Wed 5th Feb 2025
16 min read
If you’re thinking about setting up a business in Ireland and want to protect your personal interests, you should consider setting up a limited company.
Unlike other common business structures (such as sole traders), directors and shareholders of a limited company can only lose the money they’ve invested in the business.
On the other hand, if you set up as a sole trader, you can be held personally responsible for paying off your business’s debts.
Setting up a company will limit the risk you take and protect your personal assets.
Contents
Why choose a limited company over sole trader?
When starting a business in Ireland, many people set up as a sole trader because it's simpler and faster.
But while that structure does have its merits, it comes with a significant downside – unlimited personal liability.
If your sole trader business runs into financial trouble, you're personally responsible for all debts. This could put your personal assets – such as your savings, home or car – at risk.
A limited company, on the other hand, is a separate legal entity. This means:
your personal assets are protected from business debts and legal claims
you're only liable for the money you've invested in the business
you gain access to corporate tax benefits, such as Ireland's low 12.5% corporate tax rate
Being a limited company also gives your business more professional credibility, especially when dealing with larger clients or securing funding.
Real-life scenario: Lisa's story
Lisa, a freelance graphic designer based in Dublin, started as a sole trader.
As her client base grew to include large corporations, she worried about potential legal disputes and personal liability.
Switching to a limited company not only protected her personal assets but also helped her secure more corporate clients, who preferred working with incorporated businesses.
Setting up a limited company in Ireland: The steps involved
1. Appoint a director (preferably an Irish resident)
Every Irish limited company must have at least one director. They manage the company on its shareholders' behalf and are responsible for:
overseeing the company's operations
making sure the company meets its legal requirements
acting in the business's best interests
Key requirements
At least one director must be a resident of the EEA (European Economic Area).
If no directors are EEA residents, you'll need to buy a non-EEA resident bond, which acts as insurance against any penalties you might face for failing to meet this requirement.
Directors must be over 18 and not disqualified from acting as company directors.
Common pitfall: After Brexit, UK and Northern Ireland residents are no longer considered EEA residents.
This means UK-based entrepreneurs need to meet additional requirements when setting up a company in Ireland.
Why residency matters
One of the benefits of locating a business in Ireland is its low corporation tax rate of 12.5%.
To take advantage of this, your company must be able to prove that it's "centrally managed and controlled" in Ireland.
Since it's the directors who control and manage a company, having directors who are Irish residents can help with this process.
If your company is deemed not to be centrally controlled and managed in Ireland, or your directors are tax residents elsewhere, you won't qualify for the 12.5% tax rate, even if you're incorporated in Ireland.
2. Choose a company secretary
By law, all Irish companies must have a company secretary.
Their primary role is to make sure that the company meets its legal obligations, particularly when it comes to filing yearly returns and keeping accurate records.
A company secretary's key responsibilities include:
filing annual returns with the Companies Registration Office (CRO)
maintaining the company's statutory registers (for example, directors, shareholders, beneficial owners)
organising board meetings and making sure the company keeps proper records
Common pitfall: If you fail to file your annual return on time, you could be fined up to €1,200 and your company forced to undergo an audit for the next two years – even if your business is small.
Who can be a company secretary?
You need to make sure your company secretary is an organised and trustworthy person who will respond to deadlines on time.
If you have more than two directors, one of them can be the company secretary. If you have only one director, you must assign the role to someone else.
Many small businesses outsource the company secretary role to corporate service providers.
Shareholders are the people who own a company. Shares are pieces of a business, divided among the owners.
The more shares you have, the more of the financial returns you're entitled to. Shares are also usually attached to votes, with larger shareholders getting more of a say in decision-making than smaller shareholders.
For new businesses, the directors and company secretary are usually also shareholders in the business.
Deciding how many shares you should release
The number of shares you want your business to have is a big decision. The division of shares determines who legally owns a company.
If you have many shareholders, you'll have many owners, although some will hold only a few shares and so will have little control.
You issue shares when you first set up your limited company, and you can issue or transfer more at a later stage.
Types of shares
Authorised shares
The maximum number of company shares you can issue, now or in the future.
Authorised shares don't affect the value of the company, since no-one actually owns them – they're just available to be owned.
It's suggested that you authorise more shares than you intend to issue so there are shares available to future investors.
Issued shares
Shares which have been allocated to and paid for by shareholders. To start with, it's recommended you have 100,000 authorised shares and issue 100 of these at a value of €1 each.
This means that a person who's issued 50 of these shares would own 50% of the company.
4. Get a registered office address and business address
Registered office address
A registered office address is your company’s official, legal address. It must be a physical address that you monitor regularly (i.e. not a post box).
This is because the Companies Registration Office (CRO) often send important notices to this address.
Business address
A business address is where company mail, like invoices and bank statements, is sent. Don't mix a business address up with a trading address.
For example, you might be running your business and trading from your home but not want it to be your business address since it will be publicly listed.
Instead, you might choose to use a business correspondence address to keep your residential address private.
5. Choose a company name
A company name sets the tone for your whole business. It's the basis of your brand, the thing you want your customers to remember. As such, it's important you choose a name that fits you and your business.
But be aware that the CRO has rules around the company names businesses can use.
The name must be unique and distinguishable from other businesses already registered in Ireland.
Certain words (like "bank" or "insurance") need special permission.
Offensive or misleading names will be rejected.
The registrar will check your proposed name. If they reject it, it'll take longer for you to formally set up your company.
Before you submit your application, use the CRO's Company Name Checker to confirm the name you want to use is available.
6. Prepare and file incorporation documents
There's always quite a bit of paperwork when setting up a company. To legally incorporate your company, you'll need to submit the following documents through the Companies Online Registration Environment (CORE):
Form A1: Details about your directors, company secretary and shareholders.
Company constitution: Outlines the company's internal rules.
While you can handle the incorporation process yourself, many entrepreneurs prefer to hire a company formation specialist.
These professionals understand the process to the letter and can help you avoid any mistakes that could delay registration.
Incorporating a company usually takes five to 10 working days, depending on the CRO's workload.
7. Buy a company seal
A company seal is an embossing tool with your company's name engraved on it. It's used to seal certain documents to mark them as official, such as:
share certificates
legal contracts
property agreements
As a limited company, you must have a company seal, as it serves as confirmation that documents stamped with the seal are approved by the company and its directors.
A seal can only be used by the directors of your company, or with their approval. It must have the signatures of a director (or another person they authorise) and the company secretary (or another person they authorise) alongside it.
You can order a company seal from legal stationery suppliers for around €50 to €80.
8. Register the beneficial owner with the RBO
A beneficial owner is anyone who holds more than 25% of a company's shares. You need to register any beneficial owners with the Register of Beneficial Owners (RBO) no more than five months after you incorporate your business.
However, be aware that many banks won't let you open an account until you've done this, so it's better to do it sooner rather than later. If you don't register, you could be fined and/or face criminal prosecution.
Majority shareholders will need a Personal Public Service (PPS) Number to complete registration. If they don't, they must complete a form called BEN2 (or have a company formation specialist do so on their behalf).
9. Register for tax with Revenue
Private companies in Ireland have to register for tax with Revenue before they can trade and invoice customers.
This is a different process from registering with the CRO and is usually handled by an accountant.
You may need to register for:
corporation tax – mandatory for all companies
value added tax (VAT) if your turnover exceeds the VAT threshold (currently €42,500 for services and €85,000 for goods)
employers' PAYE – if you hire staff
Many start-ups forget to register for VAT, which causes delays in invoicing and cash flow issues.
10. Open an Irish business bank account
Most Irish banks need to see the following documents before they can open a business bank account for you:
Your original certificate of incorporation
Your company constitution
A copy of your A1 form
Most banks will also insist you file your RBO (see step 8) before they allow you to set up an account.
Usually, to open an Irish bank account, one of the directors will need to meet in person with a bank representative.
This is important to bear in mind if you have non-resident directors (directors not living in Ireland). In that case, you might decide to set up an online bank account.
11. File your annual returns with the CRO
When you incorporate a company, you have to file annual returns with the CRO, even if you're not trading.
Your company will be allocated an annual return date, which you can check on the CORE website. The first annual returns date is six months after the company is incorporated, but you don't need to provide any financial statements at this point.
You then have 56 days to complete all elements of the annual returns. If you miss filing deadlines, you'll be charged automatic late fees. You might also trigger a mandatory audit for your business.
12. File a director's income tax return
A director who is a beneficial owner of a business or controls more than 15% of the ordinary share capital of the business is a proprietary director.
They'll need to file a self-assessed directors' tax return using a Form 11. The first of these is due by 31 October of the year following the company's formation.
You need to file this return even if your director only has PAYE income or the company hasn't begun trading or making money yet. If you fail to do this, you might have to pay a fine.
Final thoughts: Is a limited company right for you?
There's a fair amount of work to do when setting up a limited company in Ireland, but it does offer the benefits of personal asset protection, tax breaks and professional credibility.
If you're not sure whether you can tackle the process yourself, consider working with a company formation specialist or accountant who can handle the administrative burden while you focus on growing your business.
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