For the past few years many foreign based companies have located their headquarters in Ireland.
The main benefits of locating a holding company here are:
- Low corporation tax rate of 12.5%.
- No dividend withholding tax (DWT) on payments made to individual shareholders resident in either an EU or double tax treaty country.
- No DWT where dividends are paid to a non-resident company shareholder where that company is not controlled (50% or more shareholding) by Irish tax residents.
- Dividends received by an Irish holding company from trading profits of a subsidiary are usually taxed at 12.5%.
- Limited transfer pricing legislation.
- Recent Irish Finance Acts extended the 3 year exemption from corporation tax for startup companies for the first three years of trading.
- Capital Gains Tax exemption for disposal of shares in certain subsidiary companies. There is a minimum share holding requirement of 5% and a shareholding period of 12 months within the last 2 years together with other conditions.
- Remittance taxation system available for non-domiciled Irish resident individuals which provides a tax incentive to foreign individuals to locate in Ireland.
- Combining trading activities with a holding company function – charging fees for managing a foreign subsidiary at a low corporation tax.
- Double tax treaty network with many countries which simplifies the distribution of profits internationally.
- Low capital start up costs for setting up an Irish company.
- Membership of the EU and a common currency when trading with EU member countries.
- If you are considering locating a holding company in Ireland and require further advice on these issues please contact me.