Setting up a Company with a foreign Director & No Initial Salary

G

georgemac

Guest
A few questions if there is anybody feeling helpful!

I wish to set up an Irish company with myself (an Irish citizen) and a US Citizen as directors.
I am wondering what the implications are for this on my current position.
I am presently in full-time employment and will not be ending this in the short-term as it is my main source of income to fund the new venture.

1) I do not want to have us being paid salaries as directors initially from the new company - can this be done?

2) How does this impact on paye/prsi obligations considering I am already employed and my PRSI contributions are being made?

3) Would it be possible to set up my company and not notify my current employer - i.e. - if I am not earning a salary from my new company, is there any reason that my current employer would need to know about this to start?

4) How does this affect the other director when she will not be paid a salary initially? Is PRSI still an issue, are there any other potential obligations for her to fulfill?

5) To come to Ireland the non-reident director needs to acquire Business Permission. A non-resident director needs to being €300,000 capital into the venture to acquire this permission. I think that this is waived if another director in the company is an Irish Citizen - can anybody confirm this?

6) How does Audit Exemption work - The biggest cost to establishing the business is Accountants Fee's and to give the business a chance to get on it's feet I need to minimise this. I do not expect the business to be hugely profitable within the first year and as such would like to avoid an Audit within that period - any advice?

Many thanks for your help!

-G
 
audit exemption is available to most company's with a turnover(sales below a specific limit) its currently €1.5m, to avail of this exemption, your annual return, ie list of directors, shareholders etc, must be filed with company's registration office on time, if late you loose ability to be exempt.

you probably will still have to have an accountant to prepare accounts, ie ones that comply with the company's acts, and prepared in accordance with current legislation, though this should cost less than audited accounts.

If you avail of the audit exemption in the first year and have to have accounts audited in following years the accouts will require details that the opening balances, ie the first years accounts were not audited.
 
In relation to the foreign directors, I'm not aware of the business permission legislation in detail, but I do know that company's with only foreign directors must have a bond, if not the ititial investment, I didnt think this was needed if one irish director was appointed. Its to do with residency though, not only nationality. ie you must be living in ireland
 
Re: Salary

the PRSI issue, is simpler, a director does not have to have a salary, any year. If no salary is paid, then no PRSI implications arise. You probably should register for PRSI and then submit nil returns, even if no other employees. purely for speed when you do employ staff or pay salary to directors.

This should not affect your current employment in any way.

This information is only a brief outline, and for specific advice you should see an accountant. I know they cost, but sometimes you will get more information than you initially look for.

Best of luck with the new venture
 
Thanks for that Deem.

I would be interested if anyone could tell me the particulars of obtaining business permission for a person named as a director if they are a non-EU citizen.

Perhaps business permission is not even what I am looking for. All of the literature I read on this topic concerns a non-EU national setting up a business in Ireland and therefore needing to apply for business permission to do so which allows them to be resident in the state.
In my case, I will have set up the company in Ireland and named a non-EU citizen as a director. An application for business permission needs to be made to the Minister for Justice, Equality and Law reform - a business plan etc is supposed to accompany the application. It would seem that this is for businesses that are not yet established. Does anyone know if a non-EU director would still be applying for business permission to be able to come to Ireland and conduct business on that company's behalf?

Cheers,
G.
 
If your prospective business partner is investing €300,000 in this business, then both of you will need appropriate professional advice on all relevant legal and tax issues - especially if the other party is a non-EU citizen and there are immigration issues to resolve. You really need to direct your questions to your professional advisors. You may get some answers here, and from govt depts, but unless you will be in a position to properly verify the quality or relevance of the advice you receive from these sources, there is a big risk that you may end up basing your entire strategy (and this person's money) on an incorrect or incomplete understanding of the issues involved.
 
Purple said:
Isn't the audit exemption going up to €7 million soon?
Click to expand...

It has only increased to 1.5m in the last year. I haven't heard about the €7 million.

Even at 1.5m alot of companies are audit exempt that weren't before. its a grear saving on audit fees
 
that would have a big effect on the rural and townie auditors. They gain alot of revenue from the audit. Ouch its gonna hurt.
 
howareya said:
that would have a big effect on the rural and townie auditors. They gain alot of revenue from the audit. Ouch its gonna hurt.
Click to expand...

...don't think so.

The change is being introduced in response to campaigns by the accountancy institutes to have the audit exemption threshold increased to the EU-permitted maximum.

http://www.icai.ie/media/mr-mediareldetails.cfm?mediaid=309 "ICAI 2006 statement - Audit regime in RoI has to change as exemption threshold lags behind competitors"

http://www.icai.ie/media/mr-mediareldetails.cfm?mediaid=202"ICAI welcomes committee support for audit exemption rise"
 
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