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Main characteristics for registration in Northern Ireland

Corporate tax
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Online Business
Time to complete the registration

Company Registration in Northern Ireland

Northern Ireland is a perfect place for doing business and setting up your company. Being a part of the United Kingdom, it offers attractive international business and tax opportunities along with stable political, economic and investment environment.

This article gives you an overview on how to set up a company in Northern Ireland and key points on how your business can benefit from it.

Types of legal entities:

Foreign companies and citizens may register the company in Northern Ireland in the following types:

  1. Limited liability partnership: this is the most popular type of legal entities with shareholders having limited liability to the amount of subscribed for as share capital.
  2. Private company: is a legal entity in its own right which has separate and independent legal personality, distinct from its directors and shareholders. Private companies in Northern Ireland can be set up in the form of companies limited by shares and companies limited by guarantee.
  3. Public limited company: is a legal entity that offers its shares to the public. Public limited companies have a least 50,000 GBP of issued share capital.
  4. Sole proprietorship
  5. Branch of a foreign company: This form is widely used by clients thanks to its simplicity in registration and accounting. However, you need to seek advice on tax related matters in order to understand whether it suits well for you.

Company registration documents to be submitted depend on the type of legal entity you choose from.

How long does it take to register a company in Northern Ireland?

The registration of a company in Northern Ireland is rather simple and quick. It usually takes 1-2 weeks to incorporate a company in the Northern Ireland.

Tips: you can submit registration documents and application online which will accelerate the process.

Company name (description of requirements)

There is no requirement to reserve the company’s name prior to its incorporation. In the meantime, it is necessary to follow certain rules when naming your company and filing the company’s name together with incorporation documents. The Companies House will refuse to register a name if it is offensive or implies a connection with central or local government, or with some public authorities; it is identical or too similar to the name of an existing company.

Tips: your company name is the cornerstone of your brand and this is how you make your first impression. So, you should think how it works on your logo, website, and advertisements. It is essential to check whether there is no registered trademark that has identical name. You should try to avoid such similarities; otherwise you will fail to protect your IP rights.

Company structure

Companies incorporated in Northern Ireland may have one natural director (no corporate director is permitted). There is no residency or nationality requirements for company director. A company secretary is optional, and can be either an individual or company and does not have to be resident in Northern Ireland. All companies must have a minimum of one shareholder of any residency or nationality.

It is also important to have registered office address to where official correspondence will be sent.

Tips: certain amount of information about a company must be publicly available including, for example, the company’s annual accounts, registered office address and details of directors, company secretary (if there is one) and shareholders. Your company registration agent may help you with appointing of permanent officers.

Accounting and Audit

The accounting requirements in Northern Ireland are similar in the UK. All companies incorporated in Northern Ireland are required to submit annual account. A foreign company having a branch in the Northern Ireland is required to file annual accounts of the foreign company with the Registrar of Companies. The branch itself does not need to have annual accounts.

If a UK company is a parent company, consolidated accounts must also be prepared. This does not apply to small private companies.

Audit is not mandatory for dormant companies, subsidiary companies and some small private companies.

Bank system

In Northern Ireland, banks welcome local resident companies and branches registered in Northern Ireland. The largest banks in Northern Ireland are Bank of Ireland, AIB, Ulster Bank. The principal currency in the bank account will be British Pound. Most of the banks require personal presence when opening a corporate bank account.

Tips: if you have any difficulties with opening a corporate bank account in Northern Ireland, you can consider banks in other jurisdiction. Please contact us to learn more about these opportunities.

What is the cost of company formation in Northern Ireland?

The cost of company incorporation in Northern Ireland is Euro.

Taxes in Northern Ireland

As part of the UK, most tax law that applies in Northern Ireland is the UK law. HM Revenue and Customs is responsible for collecting and administering taxes in the UK. Local taxation applies to land and property.

What companies are qualified as tax residents in Northern Ireland?

A company is resident in the UK if it is incorporated in the UK or if its central management and control are in the UK. In certain cases, a company could be resident in another jurisdiction where a tax treaty applies.

What is a taxable period in Northern Ireland?

A typical taxable period in Northern Ireland is from 1 April to 31 March. However, each company may opt another period.

When tax returns are filed in Northern Ireland?

Companies submit tax returns to Northern Ireland within 12 months of the year end.

What is corporation tax rate in Northern Ireland?

A UK resident company is liable for corporation tax on its worldwide profits and chargeable gains. Currently corporation tax rate is 19%. A non-UK resident company disposing of shares in a company is exempt from taxation in Northern Ireland, unless it has a permanent establishment in the UK.

How are dividends taxed in Northern Ireland?

There is no withholding tax on payments of dividends from a UK company. Generally, interest paid is subject to a withholding tax rate of 20%. A company may mitigate it in many cases of payment to a corporate entity, either by virtue of a double tax treaty with reduced rate, or the application of EU directives. It is necessary to apply for advance clearance to the UK tax authorities to make a payment of interest at the reduced withholding rate.

What is royalties tax rate in Northern Ireland?

Royalty is subject to withholding tax at 20%, but it can be mitigated by virtue of a double tax treaty with reduced rate, or the application of EU directives.

What is VAT rate in Northern Ireland?

VAT rate in Northern Ireland on supplies of goods and services is 20%. Certain goods and services are exempt from VAT. Reduced rate of 5% applies to certain goods and services (such as domestic gas supplies) and 0% applies to most food and children’s clothing business.

Company Liquidation

Voluntary and involuntary liquidation of companies incorporated in Northern Ireland is regulated by the Companies Act.

What are the grounds for involuntary liquidation in Northern Ireland?

A company incorporated in Northern Ireland can be liquidated compulsory based on the order of the High Court. The court proceeding can be initiated by:

  •  Creditors if a company owns more than £ 750;
  •  Company itself;
  •  Company’s directors or members;
  •  DETI;
  •  Official Receiver.

What is the procedure of involuntary liquidation in Northern Ireland?

Upon the receipt of the court order, the petition must be advertised in the Belfast Gazette and a provisional liquidator is appointed. Within 28 days of the appointment, the liquidator is responsible for investigation of the company’s affairs and causes of its failure. He also decides whether to call meetings of the creditors and contributors. The liquidator drafts the balance sheet, distributes assets and pays creditors. Finally, the company is removed from the Registrar of Companies.

What are the grounds for voluntary liquidation in Northern Ireland?

A company’s director, administrator or liquidator may propose voluntary liquidation which is to be approved by company’s members.

What is the procedure of voluntary liquidation in Northern Ireland?

When the liquidator is appointed they take control of the company and will be responsible for settling any legal disputes or outstanding contracts, selling off the company’s assets and use any money to pay creditors, pay liquidation costs and the final VAT bill, etc. Finally, the liquidator gets the company removed from the Registrar of Companies.

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