TAS Consulting

Choosing Between an Irish Branch and a Private Limited Company

This brief article aims to highlight some of the fundamental differences between the two legal entities, as well as the registration processes that enable them.

It’s vital to remember that a subsidiary company is a separate legal entity that is subject to tax legislation (and liabilities) as well as the Companies Act 2014’s rigorous Annual Filing Requirements. A subsidiary is often thought to be more tax-efficient than a branch because it is subject to Irish tax on its worldwide income rather than simply its local income.

Subsidiary companies are typically formed as a Private Company Limited by Shares (LTD or limited company), which can choose their own names and is subject to a simplified digital formation process. 

The Companies Act of 2014 has replaced the concept of a ‘place of business,’ which existed under previous legislation, with the concept of a Branch Company. This principle also applies to international corporations with limited liability that want to set up shop in Ireland. These companies can be EEA (European Economic Area) or non-EEA.

The branch will be given the same name as the foreign company and will not be able to choose its own name (unless a business name registration is applied for). It should be noted that registering a branch company is a more involved process that requires the submission of relevant forms as well as supporting documentation.

  • Copies of the foreign corporations’ constitutions (or defining documents, as the case may be) that have been apostilled.
  • Incorporation certificate
  • Certificates documenting any name changes that the company has undergone.

If they haven’t previously been done so, all of these documents must be translated into English.

As stated previously, a subsidiary is often seen as a more tax-efficient Irish firm than a branch because it is subject to Irish tax on its worldwide income rather than just its local income. Another important distinction to make between a subsidiary and a branch is achieving a balance between flexibility and accountability.

A subsidiary gives you a lot more flexibility (but also a lot more responsibility), but a branch gives you a lot less accountability (at the cost of flexibility). In the end, the environment in which you work will decide the balance you must achieve.

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