By Shannon Power, 6th February 2026
An online business is an excellent option for entrepreneurs who want to start their new venture from the comfort of their homes. Additionally, it is a popular choice for international business owners looking to take advantage of our low corporate tax rates or to establish their first headquarters in the EU.
Starting an online business in Ireland is like starting any other business in Ireland, but there are a few additional factors to consider.
Choosing the Right Business Structure: Sole Trader v Limited Company
The first thing you will need to decide is whether you want to register your business as a Sole Trader or a Limited Company. The answer to this question depends on several factors: the nature of your business, your location, expected turnover, whether you’ll maintain other employment, the level of commercial risk, whether you intend to raise investment, and your long-term tax and pension goals.
Sole Trader
A Sole Trader (or Partnership) is a business structure in which an individual operates their business independently under their own name, rather than as a separate legal entity. Unlike limited companies, sole traders are personally responsible for all aspects of their business. To operate as a sole trader, one must register with the Revenue Commissioners as self-employed. Consequently, the individual is subject to income tax on every euro the business earns.
This structure is a great choice for freelancers, consultants, and small-scale entrepreneurs. As you need to be an Irish resident to register yourself as a Sole Trader, this option is not suitable for non-residents looking to start an online business here.
Limited Company
A Limited Company, on the other hand, is a separate legal identity from its Directors and Shareholders. A Limited Company has more legal requirements, including the need to file Annual Returns with the Companies Registration Office (CRO) and tax filings with Revenue. However, it can be a better option for starting an online business because it allows you to manage your tax obligations more efficiently.
Essentials for Starting a Limited Online Business in Ireland
Along with choosing the right business structure, there are a few other key pieces of information you need to have in place to register a limited online business in Ireland.
Choosing a Company Name
Your chosen name for your online business must be unique and distinguishable from all other names on the Irish company register while adhering to all relevant requirements and restrictions. Names can be rejected for several reasons, including:
- Improper use of certain restricted words, such as ‘bank’, ‘insurance’, and ‘group’.
- Improper use of the Irish language
- Offensive language
- Implication of State Sponsorship
Check out the full list of company name restrictions here!
Appointing Directors, Company Secretary, and Shareholders
Next, you will need to identify your company’s officers and shareholders.
1. Directors –
Your Company Directors are the people whom you have appointed to run and manage the company on your behalf. The number of required directors varies depending on the type of company you have registered. For example, an LTD is required to have a minimum of 1 director.
Director requirements:
- a minimum of 18 years of age
- At least one of the proposed Directors must be a resident within the European Economic Area (EEA).
If the company does not have an EEA-resident director, they will be required to enter into a Section 137 Non-Resident Director’s Bond, which Company Bureau can arrange.
2. Company Secretary –
Next is the company secretary. All Irish companies are required to appoint a secretary who is responsible for ensuring that statutory obligations are met. If there are two directors, one can also act as the secretary. If there is only one director and no person to act as secretary, the company can appoint a qualified professional body to fulfil this role. Read more information on the duties of a Company Secretary.
3. Company Shareholders –
You will also need to identify at least one shareholder. The Shareholders, such as yourself, are the owners of your company.
During registration, your shareholders will need to provide their full names, residential addresses, and the number of shares they have been appointed to hold.
Registered Office Address
All Irish companies, whether they have a physical presence or operate online, are legally required to have a registered office address in the Republic of Ireland. This must be an actual address and cannot be a P.O. Box. This is an important requirement as it is where all CRO correspondence and formal legal notices related to your business will be sent.
If you prefer not to use your residential address or if you are not a resident of Ireland, it’s important to know that your trading address can differ from your registered address. If you need to acquire an Irish registered office address, corporate service providers like Company Bureau offer Registered Office Services that are ideal for online businesses.
Legal Requirements and Compliance
Statutory Obligations
To remain compliant as an online business in Ireland, there are a few ongoing legal requirements that need to be maintained throughout the company’s lifecycle to ensure good standing and avoid penalties.
- First annual returns must be filed within six months after incorporation, with no accounts attached, and you have 56 days to complete this filing. Subsequent annual returns are due annually from this date onward.
- Annual Accounts must be prepared and filed within 9 months of the company’s financial year-end.
- Statutory registers and documents must be maintained at the company’s registered office and must be available for inspection by members or the public.
- Directors must annually confirm compliance with relevant legal obligations, representing a personal statement of corporate governance standards.
Tax Registration
If you choose to register your online business as a sole trader, then you will need to pay income tax, PRSI, and USC on all earnings made by the company. In comparison, if you register as a Limited Company, then you will pay corporation tax on company profits, while directors pay income tax on salaries. This is the same for both online and in-person businesses.
In Ireland, there are two main rates of corporation tax, 25% and 12.5%.
- If the company has no trading base in Ireland and does not trade from Ireland, its income could be regarded as “foreign income” and could be taxed at 25%.
- If the company has a trading base in Ireland and is carrying out a trading activity from Ireland, then its worldwide trading income (profits) will be taxed at 12.5%.
To achieve the 12.5% tax rate, the company must be carrying on a trading activity and must have “substance” in Ireland. At the very least, we see this as the company having its own office and at least one employee in Ireland to manage the operation. Employment in Ireland is a crucial factor.
From the point of view of claiming the 12.5% rate of corporation tax, the company should not be or seen to be a “brass plate” operation.
Passive income, such as interest earned and rents received, is taxed at 25%, whilst Capital Gains tax is at 33%.
Value Added Tax (VAT), however, may differ depending on what and to whom you are selling goods and services. The standard VAT rate for most goods and services in Ireland is 23%, while a reduced rate of 13.5% applies to items like fuels, construction services, and take-out food. VAT registration in Ireland is mandatory only if your business meets specific turnover thresholds.
Current VAT Thresholds:
- €42,500 for service providers
- €85,000 for suppliers of goods, or for businesses supplying both goods and services where goods account for 90% or more of the turnover
Online businesses that sell digital products must follow specific VAT regulations when selling across EU borders. However, ff you sell to a customer outside the EU, you do not need to charge VAT.
Company Bank Account
All Irish companies are required to have a corporate bank account that is separate from their personal accounts. Common choices for these accounts include high street banks like AIB or Bank of Ireland. This is a suitable option for Irish residents who want to start an online business; however, Irish banks typically require a physical meeting between one of the company directors and bank representatives. During this meeting, they will seek evidence of “on-the-ground” business operations in Ireland, which can pose challenges for international online businesses that do not have a physical presence in the country.
Alternatively, you can set up an account with an online bank, also known as a Neobank, through an underwritten financial services provider. These banks do not have physical locations or branches to visit in person. However, accounts with online banks can be limited in the services they provide; for example, they may not accept cash or cheque payments and might not offer overdrafts, direct debits, or loan facilities.
Creating an Online Presence
If you are going to locate your business solely online, you will want to create a strong and memorable online presence. When establishing a digital presence, a business should concentrate on the essential elements and how they work together; these include a website, social media, and a Google My Business page.
Building a Company Website
Creating a dedicated website to sell your goods and services is the best way to establish credibility and connect with your clients. Customers tend to trust businesses with their own websites more than those using third-party platforms like Amazon or Etsy. While these platforms can help small businesses promote their products, having a website is essential for strengthening your online presence.
Things to consider when setting up your website:
- Make sure you choose a domain name which is as close as possible to your business name; this ensures you do not create confusion for your clients and strengthens your presence.
- When claiming your domain name, you must consider which domain extension best suits your business. For example, a .ie domain extension is great to show a local presence when selling to Irish clients. However, a .com domain extension may be more suitable if you plan to sell to a worldwide customer base.
- Setting up business email addresses using your domain can create a more professional presence and is seen as more credible than a Gmail or Hotmail account for your online business.
- Clear navigation is essential when designing your site, as it allows visitors to easily find what they are looking for. An easy-to-navigate site not only helps users locate the information they need more quickly, ultimately leading to a faster checkout process, but also aids search engines in indexing the pages.
- Once your site is complete and live, it’s important to ensure that search engines can find it by implementing Search Engine Optimisation (SEO). This involves setting up relevant keywords for your pages, along with appropriate meta tags and meta descriptions. Additionally, you should focus on building reputable backlinks and regularly updating your site with fresh content.
Looking to establish a presence for your online business and need a bit of extra help? Company Bureau can assist you with the above through our Web Design and Hosting Services!
Setting Up Company Social Media Accounts
In today’s digital climate, social media is crucial for establishing an online presence for your business. Having dedicated social media accounts for your online business helps boost brand awareness, broaden your customer base, connect with and boost loyalty amongst existing customers and generate additional revenue.
Creating business profiles and accounts on all major social media platforms is free and straightforward. These profiles not only showcase your brand’s personality but also provide a backlink to your company website. By using these platforms, you can foster authentic connections with your clients.
Registering a Google My Business Profile
A Google Business Profile is a free and easy-to-use tool provided by Google that allows a company to manage its online presence on Google.
Within the Google My Business Profile tool, you can:
- Manage search and maps presence
- Manage and respond to reviews
- Post photos of your team and products
- Promote products and/or special offers
- Set opening/operating hours and restrictions
- Edit other online business details
Ready to start your online business in Ireland? Our team of company formation experts would be more than happy to answer any questions you may have and help get your business up and running. Contact the Company Bureau team through our contact form here!
Disclaimer: This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.
