In order to hire a worker in Ireland as a foreign company, the labor contract must adapt to and follow the Irish regulations in this area. The Irish government requires foreign companies to have a business entity within the country.
The options for hiring employees in Ireland as a foreign company are:
A. Establish a branch office connected to the central headquarters
Foreign entities that decide to establish branch offices in Ireland have to do so in accordance with EU regulations and with the Irish law of 2017 (the Companies Accounting Act. 2017). A branch office in Ireland is considered a structure dependent on its parent company, as management decisions cannot be made by the branch.
Branch offices can hire local workers. The legal requirements for setting up a branch office in Ireland in accordance with the law and therefore being able to hire workers are, among others:
- declare your admission into the Ireland Companies Registration Office (CRO),
- have at least one director residing in the country,
- submit your annual accounts,
- register for Social Security (welfare) and in the VAT in Ireland.
One of the advantages of being a branch office is the simplicity, given that they don’t require the formation of another entity with a board of directors, etc. Therefore, if the project is short term or not very drawn-out, a branch can offer advantages in this sense.
For more information relating to the creation of a branch in Ireland, you can look at this link.
B. Establish a subsidiary
The basic difference between a subsidiary and a branch is that a subsidiary has a legal identity distinct to that of the mother company, while a branch office does not.
The creation of a subsidiary, in addition to having fiscal benefits like being taxed on its income in Ireland (where the corporate tax rate is lower than the EU average), would also have a closer relationship with Irish agents (business partners, authorities, etc.), because in Ireland local businesses are more common and something the people there are more familiar with, as opposed to branch offices.
It is interesting to note that many international businesses choose a limited liability company as the structure for their subsidiary.
For more information about the creation of companies you can look at the following link.
It is recommended in either case to contact an accredited professional in Ireland for the registration processes for either a branch office or a subsidiary. Likewise, once the branch or subsidiary has been established, it is obligatory to adhere to the responsibilities and obligations under the employment laws in Ireland..