What is the difference between a Branch and Subsidiary in Ireland?

By Simon O’ Connor, 12th August 2016

There are a number of reasons why a foreign company may want to expand their business to Ireland.  The country has already attracted some of the world’s largest companies due to attractive tax regimes, a highly educated workforce and the ease of doing business.

Foreign companies wanting to expand their business to Ireland will often choose either a branch or a subsidiary. When deciding on the legal format of the Irish company, these companies will often consider both the tax implications and the level of independence of the company.

Opening an Irish Subsidiary

An Irish subsidiary company is an independent legal entity and is subject to Irish corporation tax and strict yearly filing requirements. Companies should take into account that setting up a subsidiary is an independent legal entity and its liability is limited to its issued share capital. Subsidiaries are generally registered as Private Companies Limited by Shares (LTD) as the parent company’s liability will be limited to the share capital invested in the Irish subsidiary.

Opening a Branch Office in Ireland

A branch office is generally used when a foreign company wishes to establish a place of business in the state and is viewed as an extension of the overseas parent company. Depending on the location of the parent company, the branch office will be either a Branch EEA or Branch Non-EEA.

To incorporate a branch in Ireland, a set of legalised and authenticated corporate documents from the parent company are required. This would usually consist of an Apostilled copy of the company’s certificate of Incorporation and the Memorandum and Articles of Association. The branch office is also required to have a registered address in Ireland, and a person authorised to accept legal service in Ireland.

Should you register a branch or a subsidiary company?

The main difference between establishing a branch office and registering a subsidiary company would be the dependency on the parent company, the annual filing requirements and the taxation implications. Ireland offers attractive tax exemptions to external companies establishing branch offices in the state.

If a subsidiary company is incorporated, it will be subject to Irish corporation tax (12.5%) and strict annual filing requirements. In the situation of a branch office, only the activities of the branch itself will be subject to corporate taxation in Ireland. Companies should take into account that setting up a subsidiary is an independent legal entity and its liability is limited to its issued share capital.

For more information on Irish Branch Offices and Irish Subsidiaries, please do not hesitate to contact us on +353(0) 16461625 or alternatively you can email us at formations@companybureau.ie.


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