Starting a company with a US colleague?

[JackKelly]

I have my own limited company in Ireland while a colleague I do regular work with has one in the US. Currently we work together on remote service-based projects and he invoices the client, I invoice him.

We are interested in formalizing our working relationship and starting a company together, but how do we go about this when we are tax residents in different countries?

Can we start a third company in either Ireland or the US together? How would we draw salary? Continue to invoice our respective limited companies?

This seems like a complicated area and it’s hard to find information on, or the right people to contact for advice

 

[dublin67]

It is complicated because you looking at two different tax and legal systems and for tax you will also need to consider the interaction of the two. You could spend a lot money on advisors here and still come up with a cumbersome structure. My advise is to keep it simple and both keep your own U.S. and Irish companies as your income source. These companies can invoice whatever company you decide to work with whether it be Irish and the U.S. Perhaps a good starting point is to incorporate a company or companies where ever your customers or business are located. You can put you own structure behind that. My advise is keep is as simple as possible with as few moving parts as possible. If the business is big, or becomes big, talk to one of the larger accounting firms about a structure but the professional fees may be significant.

 

[JackKelly]

It is complicated because you looking at two different tax and legal systems and for tax you will also need to consider the interaction of the two. You could spend a lot money on advisors here and still come up with a cumbersome structure. My advise is to keep it simple and both keep your own U.S. and Irish companies as your income source. These companies can invoice whatever company you decide to work with whether it be Irish and the U.S. Perhaps a good starting point is to incorporate a company or companies where ever your customers or business are located. You can put you own structure behind that. My advise is keep is as simple as possible with as few moving parts as possible. If the business is big, or becomes big, talk to one of the larger accounting firms about a structure but the professional fees may be significant.

Thanks for taking the time to reply.

So in the most simple configuration, I continue to make my own salary payments in Ireland via my limited company A (for which I'm director/employee). We create a new company B (probably in the US) where we are each directors (but not employees). Company A invoices company B monthly.

Is this a common arrangement and something that is allowed by CRO etc. I remember being told that you can't/shouldn't invoice between companies for which you are a director of both.

 

[osheamanning]

Jack
This is perhaps not as complicated as you think.

You may set up an Irish company whereby both you and your partner are both shareholders and directors.
The CRO will not object to you invoicing one company from another, you may proceed to do this.
Directors may be paid a salary form this new company and you will operate PAYE on both directors salaries, even though one is a non-resident.
Just be careful on the formation of this new company that you do not create a 'group.