If you are thinking of starting a business there are a number of issues you need to consider. Different supports and regulations apply, depending on your particular situation. You may be employed, unemployed or someone who is coming from outside Ireland to set up a business. This document highlights some of the important information you need to know with links to relevant topics.
The website selfemployedsupports.ie has information on the services and entitlements available if you are self-employed and setting up a business.
You can set up a business as a sole trader, as a partnership or as a limited company. The type of structure you choose depends on the kind of business you are running, with whom you will be doing business and your attitude to risk. It is advisable to get the advice of a solicitor or accountant when considering the structure for your business. Businessregulation.ie is a portal to help you identify the main regulations which affect your business.
Sole trader: It is relatively simple to set up as a sole trader but if your business fails, your personal assets could be used to pay your creditors. Your main legal obligation is that you must register as a self-employed person with the Revenue Commissioners (see ‘Tax and PRSI’ below). If you wish to use a business name you must register your business name with the Companies Registration Office.
Partnership: This is where 2 or more people agree to run a business in partnership with each other. The partnership agreement should be drawn up by a solicitor. The partners are jointly responsible for running the business and if it fails all partners are jointly responsible for the debt.
Limited company: If you set up your business as a limited company, the business is a separate legal entity. If the company gets into debt, the creditors generally only have a claim on the assets of the company. The company must be registered with the Companies Registration Office (CRO) and the company reports and accounts must be returned to the CRO each year.
There is more information about these different structures on the CRO website. You can register your business name and file company returns online with the CRO using CORE (Companies Online Registration Environment).
If you are unemployed you may be eligible for the Back to Work Enterprise Allowance (BTWEA) or the Short-Term Enterprise Allowance (STEA). If you are starting a business, you also may get extra supports under these schemes, for example grants for training, market research, business plans and access to loans to buy equipment.
The Start Your Own Business scheme provides tax relief to people who are unemployed for at least 12 months and getting a qualifying social welfare payment and who set up a qualifying business. It runs from 23 October 2013 to 31 December 2016 and provides a two-year exemption from income tax (up to a maximum of €40,000 per year) for people who have been unemployed for at least 12 months prior to starting their own business. You can read more information in this Revenue guidance on the Start Your Own Business Relief.
Nationals of the European Economic Area (EEA) or Switzerland do not need permission to set up a business in Ireland. Generally, non-EEA nationals must get permission from the Minister for Justice and Equality in order to set up a business in Ireland. They may be eligible to apply for the Immigrant Investor Programme or the Start-up Entrepreneur Programme. If they wish to start a retail, catering, personal services or similar business they should apply for the business permission scheme.
County and City Enterprise Boards provide supports to local businesses that are starting up or in development. Their role is to develop indigenous enterprise potential, to stimulate economic activity at local level and to promote microenterprises (10 or fewer employees). You can find information about their seminars and start your own business courses as well as mentoring and financial supports on enterpriseboards.ie. A network of 31 Local Enterprise Offices located in local authorities will replace the City and County Enterprise Boards and deliver supports for micro and small businesses.
New Frontiers is a development programme for potential entrepreneurs, funded and coordinated by Enterprise Ireland, which is delivered locally by Institutes of Technology.
Microfinance Ireland provides loans to small businesses with no more than 10 employees, including sole traders and start-ups. The loans of between €2,000 and €25,000 are for commercially viable proposals that have been refused credit by the banks. Details of how to apply and forms are available on microfinance.ie.
JobsPlus is a new employer incentive which encourages and rewards employers who employ jobseekers on the Live Register. There are 2 levels of incentive: €7,500 for recruits unemployed for more than 12 but less than 24 months and €10,000 for recruits unemployed for more than 24 months. Eligible employers who recruit full-time employees on or after 1 July 2013 may apply for the incentive, which will initally operate on a pilot basis for a period of 6 months. JobsPlus has replaced the Revenue Job Assist and Employer Job (PRSI) Exemption Scheme which ended on 30 June 2013, but existing participants on these schemes will not be affected.
Chambers Ireland and the Irish Banking Federation (IBF) have developed a website, smallbusinessfinance.ie, for small businesses looking for information about financing or funding their business. The information is aimed at a range of businesses including start-ups, established businesses seeking to expand or innovate, businesses entering export markets and businesses with financial difficulties.
The Government set AIB and Bank of Ireland targets of €3.5 billion each in 2012 and €4 billion each in 2013 for loans to small and medium enterprises (SMEs).
Many small businesses have difficulty getting credit. Your Business Your Bank (pdf) is a guide on getting funding for small and medium businesses. It includes information on how to prepare a bank credit application. The Central Bank published a revised Code of Conduct for Business Lending to Small and Medium Enterprises (pdf) which came into effect on 1 January 2012.
If you have a small or medium business and your application for credit is refused by one of the participating banks you may apply to the Credit Review Office to have your case reviewed. To be eligible for a review your application must have been in writing. There is a bank lending application form on the website of the Credit Review Office. The fee for the review ranges from €100 up to a maximum of €250.
The Credit Guarantee Scheme aims to encourage additional lending to small and medium businesses who are commercially viable but have difficulty in accessing credit. Under the Scheme eligible applicants will be assisted in obtaining a loan and in establishing a favourable credit history. You can find out more in the information booklet about the Scheme (pdf). There are also Customer Frequently Asked Questions (pdf) as well as details of eligibility criteria (pdf).
If you are having difficulties with your creditors the Chartered Accountants Voluntary Advice service (CAVA) can give free advice and assistance on your business affairs. Contact your local Citizens Information Service or Money Advice and Budgeting Service (MABS) to see if they offer the service.
How your business is taxed depends on whether it is incorporated as a company. If it is a company then it is liable for corporation tax. If your business is not incorporated you are considered to be a sole trader and you pay tax under the self-assessment system. Further information on tax is available on selfemployedsupports.ie and from Revenue.
Start-up companies: New companies may get tax relief on the first 3 years of corporation tax and the value of the relief will be linked to the amount of employers’ PRSI paid by a company in an accounting period subject to a maximum of €5,000 per employee. In the Finance Act 2012, the relief was extended to companies that commence trading in 2012, 2013 and 2014 and, in the Finance Act 2013, the tax relief was extended to allow any unused relief arising in the first 3 years of trading to be carried forward for use in subsequent years.
If you are self-employed you pay Class S social insurance contributions. There is a guide, PRSI for the Self-Employed - SW74 on the website of the Department of Social Protection.
If you are an employer and you created new and additional jobs in 2012 you may have qualified for an exemption of employer’s PRSI for those jobs. In 2013 this scheme has been replaced by the JobsPlus incentive which aims to encourage employers to hire individuals that are long-term unemployed - see 'Funding' above.
If you are starting up a business and decide to recruit staff you must register for PAYE and PRSI with the Revenue Commissioners. You can find information about your obligations and duties as an employer and what are the rights of employees on selfemployedsupports.ie. There is a guide for employers who are starting a new business with paid employee. You can also read our documents on topics such as the minimum wage, social insurance (PRSI), leave and health and safety.
There is more information in our documents on becoming self-employed and closing or selling a business. Other sources of information include: the guide to self-employment, Toil and Trouble (pdf); Financial Support for Irish Business (pdf) and a leaflet on starting your own business (pdf) published by the Irish National Organisation of the Unemployed.
Your local County or City Enterprise Board provides information, training, advice and financial support to small businesses.
Enterprise Ireland is an Irish Government agency which is responsible for the development of Irish industry. It provides advice and financial support to High Potential Start-Up (HPSU) businesses. You can find information about starting a new business on its website.
IDA (Irish Development Authority) Ireland is an Irish Government agency with responsibility for securing new investment from overseas in manufacturing and internationally traded services sectors. It can provide information about setting up a business in Ireland and may provide grants to companies wishing to locate in Ireland or expand their existing operations in Ireland.
The Enterprise Europe Network has published Info2innovate, an online directory of innovation supports and services for small and medium enterprises.
The Action Plan for Jobs 2014 has a major focus on entrepreneurship with a commitment to delivering a National Entrepreneurship Policy Statement. The Action Plan includes the following supports for self-employed people:
If you have a question relating to this topic you can contact the Citizens Information Phone Service on 0761 07 4000 (Monday to Friday, 9am to 8pm) or you can visit your local Citizens Information Centre.