ON THE 23RD OF JUNE 2016 51.9% THE BRITISH ELECTORATE VOTED TO LEAVE THE EUROPEAN UNION

On the 23rd of June 2016, 51.9% of the British electorate voted to leave the European Union and invoke Article 50 of the European Union Treaty. At the time of writing the exact consequences of this decision are unknown but what is telling is that it was very much a shock to the City, virtually all multi-national businesses based in the UK were against it whilst the Bank of England gave dire warnings of impending doom. So far, much of what was feared has not come to fruition but of course as of the 2018 we have not actually left yet but what is clear is that there has been a significant reduction in the UK’s growth rate, Sterling has fallen considerably, London property prices are now falling whilst the UK itself has fallen from being the World’s 5th to the World’s 6th largest economy.

BREXIT, THE LOSS OF EU DIRECTIVES & REGULATIONS AND THE NEED FOR TAX TREATY PLANNING

With Brexit many of the previously applicable EU tax planning directives and regulations will no longer be available to UK based businesses and tax planning will need to revert to individually considering each and every potentially applicable tax treaty. The unfortunate consequence of this is that it will inevitably become more expensive for UK businesses to seek to mitigate their EU/international tax positions unless they can migrate all or part of their activities. For example, as part of the EU a UK based business could avail of directives such as the parent subsidiary directive 90/435, which meant that throughout the EU dividends could be paid without fear of any withholding taxes whilst directive 03/49 meant that loans granted from one EU company and/or bank to another EU based company or bank would not be subject to withholding taxes on interest. From the 29th of March 2019 – subject to any agreed transitional period – these single economic market benefits will no longer apply or be available unless appropriate relocation steps are taken.

BREXIT AND THE BENEFITS OF ESTABLISHING AN IRISH EU BASED PRESENCE

Unlike the UK, the Republic of Ireland will remain a full member of the European Union with all its inherent single market access benefits. For this reason, it is expected that many British businesses will seek to relocate at least part of their business to Ireland from the UK in order not to disadvantage themselves within the EU market place. As a relocation jurisdiction, the Republic of Ireland has many attractions for both UK businesses and individuals including:

1. The Republic of Ireland uses the same common law system of law as the UK;
2. Its principal language is English;
3. It will continue to fully benefit from EU membership including directive and regulation benefits;
4. Its service, banking and insurance sectors are subject to very similar rules and regulations to those of the UK and it is deemed to be one of the best regulated EU jurisdictions;
5. Accountancy standards are the same as the UK;
6. There is a pool of highly educated labour;
7. Dublin is a hub airport with extensive direct connections to all major EU countries, UK cities and North America;
8. The corporate tax rate is only 12.5% and is unlikely to be changed in the foreseeable future;
9. Irish Company formation only takes between 3-5 days and Irish company do not need to be capitalized;
10. Dublin is a major international finance centre

WHY CHOOSE THE SCF GROUP TO BE YOUR PARTNER IN IRELAND?

1. The SCF Group has provided Irish company formation, management and accountancy services for over 25 years;
2. Our management and invoicing services are carried out by chartered accountants and experienced administrators;
3. We have experience of dealing with the Irish Revenue Commissioners and the Company Registration Office (CRO) and can ensure that submissions are correctly done and recorded;
4. For non-Irish domiciled individuals moving to Ireland we can advise on how best to benefit from the very favorable tax system which may allow – with the correct advice and structures – individuals only to be taxed on their remitted Irish income;
5. An SCF managed company, even including full management, invoicing, accountancy and VAT registration is often far more economic than establishing your own office