1. What Does Incorporating a Business Mean? In Ireland, a “business ” typically exists as soon as the person running it decides it exists. That can mean starting a tech company, selling soap you make in your bathtub or just doing some small jobs for other people for cash.
Calling it a “business” simply indicates that you intend to make money from it by providing goods or services to customers.
A company , on the other hand, is a particular structure that is registered with the Companies Registration Office (the “CRO ”). Companies come with rights and responsibilities, but also plenty of benefits.
Incorporation
This article covers the possible options for someone starting out in business and whether they should set up a company or not to run their business through.
2. What is the alternative to incorporation? By default, a business has no existence, apart from its owners. We call it a sole trader if it has only one owner, or a partnership if it has multiple owners. While sole traders do not have the same administrative requirements as a company, they have less protections too.
3. What are the benefits of incorporating a business? Generally, there are two main benefits to structuring your business as a company:
Asset protection; and Tax. Asset Protection This is also known as ‘limited liability
It’s ‘limited’ because if the company gets sued for something, the liability of the company owners (also called the shareholders) is limited
Example: Imagine there was €20,000 in your business’ bank account and your business was to fix cars. Imagine you incorrectly repaired a car and accidentally left one of the wheels loose. The owner of the car drives out of the garage, the wheel comes off the car, the car crashes into a Porsche while the wheel continues to roll down the street and injures a pedestrian. All because you failed to ensure the wheel was tight on the car. It doesn’t take much to figure out that the repair bill for the Porsche and the pedestrian’s hospital bills are going to add up to more than the €20,000 in your business bank account. If you are operating your business as a sole trader, the pedestrian and the Porsche owner could sue you (the individual) and if the damage cost €100,000, that would have to come from the €20,000 in your bank account but also you might have to sell some of your personal assets, like your car or house, to pay for the rest of the damage, because the accident was technically your fault. However, if you were doing business through a limited company rather than as a sole trader, then the Porsche owner and the pedestrian can (in most cases) only sue your company. If there is only €20,000 in the company’s bank account, then that is all they could get. Your company may go bust because of this, but at least your personal assets remain protected. This might seem like a great concept, and it is. The reason it’s like this is to encourage people to start businesses . You wouldn’t get many people starting businesses if their assets were on the line if they ever made a genuine mistake!
Tax It was Benjamin Franklin that said “in this world, nothing can be said to be certain, except death and taxes ” and right he was.
If you are running your business as a sole trader, every euro you earn (over your tax free allowance) is immediately taxable . So, in 2025, if you earned anything over €44,000 , it would be taxed somewhere around an effective rate of 50% , give or take depending on your personal circumstances.
The issue is that you have no control over that taxation. If your business does well and you earn €100,000, you get hit hard for tax immediately because that revenue is treated the same way as a salary would be and is taxed as you earn it. The only way you can reduce your tax as a sole trader is through expenses .
With a limited company, because it is a separate ‘person’ than you (the individual), money from customers goes into the company bank account and then you, personally, have flexibility as to how much of that is paid to you.
We often see founders paying themselves less than €42,000 per year so that they only pay the 20% tax rate . The rest of the cash accumulates in the company bank account to be used later.
It’s important to note that a company in Ireland has to pay 12.5% corporate tax on its profits but that can also be reduced with expenses. While using a company structure doesn’t allow you to avoid paying the income tax, it can help defer the tax payments until a time that suits you better.
For example, it might suit you better to take out the cash a few years later when you have moved abroad and are no longer tax resident in Ireland or the UK . Or you could have had a crypto company that had €2 million revenue in the first year and you decide never to work again and pay yourself €44k every year for the next 50 years at 20% income tax rate. Without a company, you would immediately be handing 1 of those 2 million over to Revenue .
There are, of course, some other benefits to incorporation:
It looks more professional and credible; You can hire employees through the company; You can take investment 4. What are the disadvantages of incorporating a business? There is a little more administration to be done here - but that’s it!
You need to incorporate the company with the CRO . This involves providing some personal and business information to the CRO, filling in some forms and signing some papers. You also need to pay a €50 fee (or just get us to do it all for you for €99, including that €50!)
It also comes with the obligation to make a yearly filing with the CRO and those filings have to be accompanied by financial statements.
In the early stages of a company, those financial statements don’t need to be scary . They can simply be a basic reflection of the income and outgoings of the company but do have to comply with some content and formatting requirements. Generally, they are nothing to be feared though - and Open Forest can take care of that admin for you .
The bigger the company gets, the better off you are hiring an accountant or a bookkeeper to take care of those financial statements, but the CRO filing is always straightforward.
A word of warning though, the annual return filings should never be missed - missing one of those filings opens up a world of pain for founders, including having to get the financial statements audited by an accountant every year - a costly exercise!
Additionally, if you are the director of your company and want to pay yourself, you will be acting as both the employer and the employee. You will have to set the company up with Revenue and, wearing your employer hat, pay yourself through the PAYE system as an employee. It takes a bit of getting used to at the start!
Finally, one disadvantage is that if the business of the company doesn’t work out, for whatever reason, then it can cost a couple of hundred euro to close down the company - but that's the worst of it! You can opt to keep the company live so long as you pay your €20 per year fee for filing your annual returns and keep filing financial statements (even though the statements will be reflecting no revenue). Who knows, maybe one day you will be able to repurpose the company for a new venture. A quick company name change and you’re off!
5. When to incorporate? If you have ever been on a startup accelerator programme or tried to get any government grants or funding , you have probably faced some pressure to have a company in place.
Otherwise, it might be because the business idea you have is close to getting a first customer , or you might need to take on an investment and will need to give someone shares in the company for their investment.
Or you might just want to look more professional , make some headed paper with your company name on it and make your business feel bigger.
Similarly, if you want to take on your first employee , or go into a partnership with someone else on this venture, setting up a company is a great way to keep those relationships structured.
If your business is in an inherently risky area, perhaps something involving the public where they could have accidents, an ice rink or an adventure centre, then you'll want that limited liability protection. If your business is giving out professional advice that people will be relying on, then you might also want to incorporate early.
If you are selling knitting wool for jumpers and are only planning on making €30,000 per year in revenue, the light admin might not even be worth the effort and staying as a sole trader is probably the best option.
It’s pretty easy to justify the need to incorporate a company, but it does actually need to be justified!
6. What types of companies are there? There are a few possibilities to choose from in Ireland, and we could go ahead and list them all here - but if you have to ask the question, you are 99.9% likely to only need the ‘Private Company Limited by Shares (LTD) ’. If you think you need anything different, reach out to us.
7. Who can incorporate companies? In Ireland, both individuals and other companies can incorporate a limited company . This process is open to Irish residents, non-residents , and international businesses. There are some restrictions including having at least one EEA resident director, but there are ways around this. The company must also have a registered office address in Ireland and appoint a company secretary .
8. What do you need? You need to know who is going to be the directors , the shareholders and the company secretary .
The directors are the people that run the day to day business of the company.
The shareholders are the people who own shares in the company and are considered to be the company owners. The directors work for the shareholders.
More often than not, the two are the same for early stage companies.
The company secretary is the person (or company) that is responsible for looking after the filings of the company and ensuring that the company keeps compliant with company laws.
You only need to have one director, but if there is only one, the company secretary needs to be someone different. If you have two or more directors, then one of you can be the company secretary.
You can have up to 149 shareholders although that would be incredibly rare. Normally the initial directors will take shares in whatever percentage split they agree.
Can you do it yourself? Yes, absolutely. If you know what you are doing, then go for it. You can sign up for a CRO account and go through the process yourself in an hour or so. We even have a free step-by-step guide here .
Should you do it yourself? Absolutely not, why bother? Look at how cheap we will do it for you here . We do it for as low as €99 including the CRO fees and VAT. You have to pay the CRO €50 anyway. We are all about saving cash in the early stages of business, but this one is not worth it.
We will even give you access to the Open Forest platform so you can keep track of all of your legal, tax and accounting obligations - at no additional cost
Frequently Asked Questions (FAQs)
1. How do I incorporate my business in Ireland? You can incorporate through the Companies Registration Office (CRO) directly for €50, or use a service provider like Open Forest who will handle the entire process including CRO fees for €99, including VAT and CRO fees.
2. How much does it cost to incorporate a company in Ireland? The CRO fee is €50, and professional services can help complete the process for around €99 including VAT and fees.
3. How long does it take to incorporate a company in Ireland? If you do it on your own, it will take you around 2 hours and then 10 days to approve. If you use Open Forest, it will take you around 14 minutes to complete our form and then 5 days for approval.
4. How many directors does a company need in Ireland? A company needs at least one director, but if there's only one director, the company must have a separate company secretary.
5. Do I need a company secretary when incorporating? Yes. If you have only one director, the secretary must be a different person. With two or more directors, one can serve as secretary.
6. Can one person set up a limited company in Ireland? Yes, one person can set up a limited company in Ireland as the sole director, though they'll need a separate company secretary in this case.
7. What are the ongoing obligations after incorporating? You must file annual returns with the CRO, prepare financial statements, and manage PAYE if paying yourself as an employee-director.
8. Can non-residents incorporate a company in Ireland? Yes, but the company must have at least one EEA-resident director and an Irish registered office address.
9. How many shareholders can an Irish limited company have? A private limited company can have up to 149 shareholders, though most start with just the founding directors as shareholders.
10. What is the tax rate for a Ltd company in Ireland? Irish limited companies pay 12.5% corporate tax on profits, which can be reduced through expenses.
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