Guide
UK or Ireland: which should you incorporate in?
Updated
This is usually presented as a tax comparison. It is more often a market access question, and the tax difference only matters once you are profitable enough for it to.
The published figures
| United Kingdom | Ireland | |
|---|---|---|
| Registry | Companies House | Companies Registration Office |
| Online incorporation fee | £100 (paper £124, same day £156) | Not published here, cro.ie could not be read today |
| Corporation tax, trading profits | 25% over £250,000; 19% at £50,000 or less; marginal relief between | 12.5% |
| Corporation tax, other income | Same rates apply to profits generally | 25% on non-trading income such as rental and investment income |
| Single market | Outside the EU | EU member state, euro |
| Legal system | Common law | Common law |
Sources: Companies House fees, HMRC Corporation Tax rates, Revenue basis of charge.
The question that actually decides it
Not the rate. Ask instead: is there a customer, a regulator or a procurement rule that requires an entity established in the EU? If yes, an Irish company earns its keep from day one. If no, a UK company selling into the EU is ordinary practice, and a second entity buys you two sets of accounts, two filing calendars and a second bank relationship for a rate advantage you cannot use until you are meaningfully profitable.
What people get wrong
- Treating 12.5% as automatic. Revenue applies 12.5% to trading income and 25% to non-trading income. Whether your profits are trading profits is a facts question about what the company actually does.
- Assuming incorporation moves tax residence. Where a company is resident turns on more than where it was registered, and a company run from one country while registered in another can face a claim from both.
- Confusing VAT with incorporation. Selling into the EU frequently means VAT registration obligations that exist whether or not you have an EU company. That is often the real problem people are trying to solve.
- Forgetting the founder. Neither choice changes where you are taxed on salary or dividends. That follows your own residence.
Both countries' figures move on their own budget cycles. Check Companies House, HMRC and Revenue directly before acting, and get advice that covers your personal position as well as the company's.