What to Consider When Incorporating in Ireland or Australia

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6 min read
There are a host of reasons why companies might want to set up a headquarters or a subsidiary in locales such as Ireland or Australia. The advantages range from low corporate tax rates to stable, pro-business economies centered in geographically advantageous locations. But with these benefits come a number of regulations and stipulations that one must navigate in order to keep your company compliant with local governance. Below are three key areas of concern to keep in mind if you are looking to incorporate abroad. By paying attention to these areas of regulation, you can ensure that your company stays compliant.

Why choose to incorporate in Ireland or Australia?

Here's a brief overview of the advantages a company can gain by choosing to incorporate in one of these locations. Ireland
  • Corporation tax rate is 12.5 percent, which is the lowest in the European Union
  • European Union Member
  • Only English-speaking country in the Eurozone

  • Resilient and stable economy
  • Impressive 26 years of consecutive annual growth
  • Geographic location enables company to be well positioned for business in Asia

3 Steps for Incorporation Compliance

Now that we have reviewed some of the business benefits offered by these three locations, let's look at the necessary steps a corporation must take to remain in compliance.

#1 Registration of Business
The first step to incorporating a business abroad is registering it with the respective regulatory organization.

For Irish companies, this regulatory organization is the Irish Companies Registration Office (CRO). Documents containing the proposed name of the entity, shareholders, directors and company secretary must be submitted to the CRO for approval. Proposed company names cannot be too similar to names of existing companies, they cannot be offensive and they cannot suggest state sponsorship.

Check with the Irish Register of Companies, the Irish Business Names Register, and the Irish and EU Trade Markets register to make sure your proposed business name is sufficiently distinct. Any business name that is too similar to existing businesses or trademarks could incur legal action.

In Australia, a similar process of name registration and approval must be completed with the Australian Securities and Investments Commission (ASIC). Companies begin this process by first registering with the Australian Taxation Office (ATO) in order to obtain an Australian Business Number (ABN). Companies wishing to file must submit documents detailing all corporate information with respect to directors and shareholders, and the proposed company name will go through a corresponding evaluation process.

#2 Establishing a Board of Directors
Both Ireland and Australia require that all companies wishing to incorporate establish a board of directors. Depending on the specific locale, the makeup of this board differs slightly.

The management of Irish companies is almost always delegated to a board of directors. For most companies, the board must have a minimum of two directors, one of whom may be the secretary. LTD companies may have one director, but in these cases, there must be a separate company secretary. The directors are obliged to act in the best interest of the company and to ensure that the company is in compliance with Irish company law. At least one of the board directors must be a resident of a Member State of European Economic Area (EEA). Companies wishing to avoid the residency requirement may post a bond, which insures the company against fines for any offenses under company law or tax legislation.

The Board of Directors for companies established in Ireland is responsible for maintaining various statutory registers, including:
  • Register of members
  • Register of directors and secretaries
  • Register of directors' and secretaries' interests in shares and debentures
  • Register of debenture holders

All Irish companies are required to keep minutes of their general meetings, and directors are responsible for keeping minutes of the directors' meetings.

Likewise, Australian companies must also establish a board of directors, and there are residency requirements involved in this decision. The most common option for setting up a company in Australia is the registration of a private limited company with the Australian Securities and Investments Commission. This private limited company would then be considered an Australian incorporated subsidiary company. As such, it is a separate legal entity with its own identity for tax and legal purposes. The board of directors must include at least one Australian resident. That said, the company itself may be entirely foreign-owned.

#3 Accounting and Reporting
Once the corporation has been established and registered with its respective regulatory agency, the corporation must follow established practices of accounting and reporting in order to remain compliant. The CRO requires the board of directors of Irish companies to prepare annual financial statements, which must provide a true and fair account of the state of affairs of the company. In preparing these statements, directors are expected to:
  • Select a suitable form of accounting and apply it consistently
  • Make reasonable and prudent estimates and judgments
  • Prepare the statements on a going-concern basis
A registered auditor must audit these statements. The audit includes an examination of evidence relevant to the amounts and disclosures reported in the financial statements. The auditor will also determine whether the directors have used a suitable form of accounting, and whether their estimates and judgments are considered reasonable.

Companies must deliver an Annual Return Filing to the CRO at least once a year. These returns must include details of the company's directors, capital and the auditor's registration number.

For entities located in Australia, ASIC provides companies with an annual company statement. It is the responsibility of the directors to review this statement for accuracy and to confirm that the information contained in it is correct. The directors must then pay the annual fee stipulated by the statement and pass a solvency resolution.

Companies deemed 'wholly foreign-owned' are required to file audited financial reports to ASIC. Subsequently, this report will become available to the public. For those companies not required to file officially audited statutory accounts, the directors still have the obligation to maintain accurate financial accounting records that explain the companies' financial transactions and overall position. These accounts are necessary to meet the director's obligation to ensure that the company can meet its expenses and debts.

Leverage Technology to Streamline Incorporation

The laws and regulations governing corporations are often complicated and difficult to navigate. Companies wishing to take advantage of the benefits offered by locales such as Ireland, Australia and Delaware need to be mindful of these regulations in order to keep their businesses compliant.

Entity management software can streamline this process by simplifying and automating the many tasks involved in incorporating. Quality entity management software can minimize the time and workload of monitoring these specifications and maintain your company's compliance in the bargain.