A Complete Guide to Incorporating Your Consulting Company in Ireland

Feb 9, 2025

Time to read:

minutes

Who should read this?

This article is written for professionals transitioning from PAYE employment or from being a sole trader to setting up a company to do independent consulting work in Ireland.

If you're considering setting up your own limited liability company for consulting services, this comprehensive guide will walk you through the process and benefits.

Key Takeaways:

Limited companies can offer superior tax advantages compared to sole trader status, with Ireland's low 12.5% corporate tax rate and various business expense deductions
You need at least one EEA-resident director and a separate Company Secretary, plus an Irish registered office address to incorporate
Regular compliance includes annual returns, corporation tax registration, potential VAT registration, and RBO filing
Professional appearance and limited liability protection make the company structure worthwhile despite the additional administrative requirements
Business expenses can include office costs, travel, equipment, and professional development, offering significant tax advantages
The incorporation process is straightforward, and if needed, companies can be wound down for approximately €300

Making the transition from traditional employment or from being a sole trader to consulting work can represent an exciting professional milestone.

Many professionals in Ireland eventually move from PAYE employment into more flexible consulting roles, often discovering that establishing their own limited company provides the ideal structure for their new venture.

Some of those benefits are set out below:

The Corporate Tax Advantage

Ireland's corporate tax environment makes it particularly attractive for using limited company structures for business. The standard 12.5% corporate tax rate stands as one of Europe's most competitive rates, offering significant advantages over operating as a sole trader where you might face higher personal tax rates.

One of the most appealing aspects of operating through a limited company is the ability to claim business expenses, effectively reducing your tax liability.

These expenses can include:

- Professional development costs such as courses, conferences, and certifications

- Office expenses, including home office setup and maintenance

- Technology and equipment purchases

- Travel costs related to business meetings and client visits

- Professional memberships and subscriptions

- Marketing and website development expenses

When operating as a limited company, these expenses can sometimes overlap with personal use, offering additional tax advantages.

For example, a laptop purchased for business is realistically also going to serve some personal needs too (just don't tell the tax man), or a home office space might qualify for partial expense claims.

Limited Company vs. Sole Trader

Choosing to operate as a limited company rather than a sole trader brings several significant advantages. The most important benefit is the concept of limited liability, which protects your personal assets from business liabilities. This means that if your consulting business faces financial difficulties, your personal savings and property remain protected.

Furthermore, operating as a limited company projects a more professional image to potential clients, particularly when dealing with larger corporations or international businesses. Many organisations prefer or even require their consultants to operate through limited companies for compliance and procurement purposes.

Understanding Company Structure

At its core, a consulting company follows the same basic structure as any other limited company in Ireland. The main difference typically lies in the nature of the business rather than the legal structure itself.

Share Capital Explained

One of the first decisions you'll need to make involves your company's share capital structure. The "authorised share capital" represents the maximum number of shares your company can issue. For most single-person consulting companies, incorporating with 100 or 1,000 shares proves perfectly adequate.

While tech startups might need more complex share structures to accommodate future investors, a straightforward share structure works well for service-based consulting businesses.

Leadership Requirements

Every Irish limited company must have at least one director who resides in the European Economic Area (EEA) and a Company Secretary. Importantly, if your company has only one director, this person cannot also serve as the Company Secretary.

You'll also need an Irish registered office address for official communications.

Ongoing Obligations

After incorporation, several key obligations require attention:

You must register for corporation tax, typically within 30 days of starting to trade

VAT registration becomes necessary if you exceed the €45,500 threshold for services in a 12-month period (accurate as at 2025)

Annual return filings must be completed with the Companies Registration Office. The first one must be filed 6 months after incorporation.

Your company details need registration with rbo.gov.ie within five months of incorporation

While these obligations might seem daunting initially, they follow a predictable pattern that becomes routine over time. If it's a concern - Open Forest provide tools and reminders to help you track and fulfil these obligations efficiently. If you set up your company with us, we will make sure you don't miss anything important.

The Reality of Running a Limited Company

Though establishing a limited company involves more administrative work than operating as a sole trader, the benefits often outweigh the additional responsibilities.

The process becomes manageable once you establish good practices and potentially engage professional help for key tasks like annual accounts preparation.

It's also worth noting that if circumstances change, closing the company remains a straightforward process, typically costing around €300 if it's a basic enough scenario - which simple consulting companies normally are.

This relatively low exit cost makes the decision to incorporate less daunting, knowing you have options if your business direction changes.

Getting Started

To begin the incorporation process, you'll need to:

Choose your company name
Prepare necessary documentation, including director details and registered office address
Decide on your share structure
Submit your incorporation application

The entire process typically takes just a few days, after which you can begin operating as a limited company. While the journey to becoming a limited company requires some initial effort, the long-term benefits make it a worthwhile investment for most consulting professionals in Ireland.

Remember that while this guide provides a basic overview, you should save yourself some headaches and use a company like Open Forest to make sure you start off right.

How Can Open Forest Help?

‍Open Forest offers the cheapest and fastest incorporation packages in Ireland including holding companies for €99 including CRO fees, VAT and access to the Open Forest platform so you can keep track of all of your legal, tax and accounting obligations - at no additional cost.

Choose from one of our incorporation packages here and we will take care of the rest.

Frequently Asked Questions (FAQs)

How much does it cost to incorporate a consulting company in Ireland?

The basic incorporation fee is relatively modest, typically around €100-€250 depending on your chosen formation method. Additional costs may include professional fees if you use an accountant or company formation agent.

Do I need to register for VAT immediately after incorporating?

You only need to register for VAT once your turnover exceeds €37,500 for services in a 12-month period. However, you can voluntarily register before reaching this threshold if it benefits your business.

Can I be the only director of my consulting company?

Yes, you can be the only director, but you'll need a separate Company Secretary. If you're the only director, you cannot also serve as Company Secretary. Additionally, at least one director must be an EEA resident.

What ongoing costs should I expect after incorporation?

The main ongoing costs include annual return filing fees (approximately €20), accountancy fees for annual accounts preparation, and potentially company secretary services if you use a professional service provider.

How to set up a consulting business in Ireland?

Setting up a consulting business involves choosing your business structure (typically a limited company), registering with the Companies Registration Office, obtaining a tax registration number, and setting up a business bank account. The process typically takes 10-12 working days once all documentation is submitted but you can use Open Forest to do it in 5-6 days.

What is the best legal structure for a consulting business?

For most consultants, a private limited company offers the best combination of tax efficiency, professional credibility, and personal asset protection. This structure is particularly advantageous when dealing with larger clients and managing potential business liabilities.

How do I start my own consulting business?

Begin by defining your service offering and target market, then incorporate your company, register for relevant taxes, set up proper business insurance, and establish your pricing structure. You should also create a business plan and consider engaging an accountant for financial guidance.

How to incorporate a company in Ireland?

Incorporation requires submitting an A1 form to the Companies Registration Office with your company details, director information, and registered office address. You'll need at least one EEA-resident director, a separate Company Secretary, and a registered office in Ireland. Save yourself the time figuring it all out - use Open Forest. We are super super cheap, easy to use and you won't miss any of your obligations.

What is the best business structure for a single owner?

Registering a Company in Ireland - A Step by Step Guide

August 2024