By Andrew Lambe, 18th April 2012 (information checked and updated 5th September 2014)
Having personally attended the Government’s ‘Action Plan for Jobs 2012’ in the Clontarf Castle Hotel this week, I am delighted to bring you a list of main incentives and initiatives that have been introduced or are currently available to encourage enterpreneurs to register a company in Ireland. I have summarised the inititives as follows:
1. SEED CAPITAL SCHEME:
If you start up and work in your own business you can claim back the income tax you paid in the previous six years to invest equity into a company engaged in a qualifying trade. The scheme is now open to a wide range of sectors and the ceiling on recoverable tax can now be up to €100,000 in each of the six years. More details can be obtained from the Irish Revenue Commissioners.
2. THREE YEAR CORPORATE TAX EXEMPTION:
First three years of trading income and certain gains of new start-up companies are relieved from Corporation tax. This includes full relief on income and gains where total Incorporation tax in any of the first 3 years does not exceed €40,000.
Marginal relief on where liability falls between €40k and €60k. Company must have at least 1 employee to be eligible. More details can be obtained from the Irish Revenue Commissioners.
3. R&D TAX CREDIT UP TO €100,000:
First €100,000 of R&D expenditure will benefit from 25% R&D tax credit from 2012. This is particularly beneficial to SME’S.
4. PRSI EXEMPTION SCHEME
This new initiative exempts employers who create new and additional jobs from paying the employers portion of the PRSI contribution for 12 months. Employees must have been on the live register for 6 months.
5. TAKING ON A PERSON ONE YEAR OUT OF WORK (DOUBLE TAX RELIEF)
Employer gets double write-offs on the wages plus employers PRSI for 3 years. It is worth €2,500 P/A to a company and up to €8,000 P/A for a sole trader.
Worker gets extra tax allowance of €3,810 plus €1,270 for each child in year 1 and 2/3 of these allowances in year 2, 1/3 in year 3. For a worker on the 20% rate it is worth €762 in the 1st year or €1,524 over the 3 years. Please contact Revenue for more information.
6. BACK TO WORK (ENTERPRISE) ALLOWANCE
If you have been signed on for over 12 months and would like to become self-employed, this allowance allows you to keep your social welfare payment for 2 years (year 1: 100% and year 2:75%)
To qualify you must be: setting up a business that has been approved in writing by a facilitator.
7. POTENTIAL EXPORTERS DIVISION (Enterprise Ireland)
In conjunction with EI the new Potential Exporter Division will provide assistance designed to aid client companies investigate, prepare and execute an International strategy including:
• Market Intelligence, practical business advice
• Targeted funding supports where applicable
• Suitable training and development
• Phone (01) 727 2829 or visit www.enterprise-ireland.com/getexportready
8. MICRO FINANCE FUND
A new Goverment backed fund which will support new start-ups employing not more than 10 people to get access to loans of up to €25k. These loans will be given to commercially viable proposals which do not meet the conventional risk criteria applied by commercial banks.
Applicants must demonstrate that they have been refused credit by a commercial lending institution before their application can be considered.
9. PARTIAL LOAN GUARANTEE SCHEME
This Government scheme will partially guarantee loans to viable businesses that have been refused by other institutions. Businesses must show an ability to re-pay the loan and the assessment will be carried out entirely by the bank. Strict terms will protect the tax-payer.
10. HIGH POTENTIAL START-UP (Enterprise Ireland)
To qualify a company should be headquartered in Ireland, less than 6 years old and capable of creating 10 jobs in Ireland and realising €1 million in sales within 3-4 years. Please contact EI for further information.
11. COMPETETIVE START FUND (Enterprise Ireland)
This fund awards €50,000 to innovative start-ups which have the ability to succeed in global markets. You are eligible if you are currently part of EI’s HPSU programme.
For more info email: firstname.lastname@example.org or phone 01 727 2202.
12. INNOVATION VOUCHERS
If you own or manage a small business with a company registration number and you have a viable opportunity that you would like to explore, you can apply for an innovation voucher worth €5,000. Enterprise Ireland are manging this scheme so please contact them for more information.
13. CREDIT REFUSALS
If you are a small business owner, sole trader or farm owner who has had issues getting credit of up to the new €500,000 you can contact the credit Review Office for an Independent review. The banks have to comply with the recommendation or give their reasons for not doing so to the Credit Review Office. According to Minister Richard Bruton, the Office has overturned the banks decision in 50% of cases last year.
Call them on 1850 211 789 or visit www.creditreview.ie where they can give you advice on how to approach your bank. A new code of conduct has also come into effect in 2012 in relation to lender procedures when dealing with SME’s in financial trouble such as:
• Details of fees or changes that may apply as a result of financial difficulty
• Type of information the Lender may require from SME’s
• Information on firms rights to appeal a decision on a lending arrangement.
14. NEW FRONTIERS PROGRAMME
This new entrepreneur development programme will be delivered at a local level by the IT’s.
If you have an innovative idea or plan to run your own business, this new frontiers programme can provide a package of support to help accelerate this idea or business.
EI is allocating €4.25 million in funding to enable this collaboration with the Institutes of Technology.
For more information on any of the above incentives, or for more information on registering your company in Ireland, please don’t hesitate to contact us.