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Irish Holding Companies

Irish Holding Companies - Incorporation and management of
Irish Holding Companies - Incorporation and management of

Ireland is an attractive jurisdiction for holding companies, given Ireland’s foreign tax credit system and dividend payment rules

Ireland has in recent years become a destination of choice for holding companies because of its capital gains participation exemption, generous foreign tax credit system, membership of the EU, ever expanding double tax treaty network, lack of CFC and thin capitalisation rules and the general ability to pay dividends free of withholding tax. The changes contained

In the Finance Act 2010 (the “Act”) can be seen as continuing evidence of the Irish government’s commitment to attracting holding companies to Ireland.

There are a number of key taxation reliefs and exemptions to make Ireland a very attractive place for multinational companies to locate a holding company here. The main advantages are::


No withholding tax on the payment of dividends by the holding
company to EU or tax treaty countries.

No Capital Gains Tax on the disposal of shareholdings in subsidiaries.

No transfer pricing, thin capitalisation or CFC rules.

Tax deductions for interest on borrowings to acquire
shareholdings in subsidiaries

Favourable treatment on the receipt of dividend income

Extensive Tax Treaty network and access to EU Parent-Subsidiary Directive

Low tax rates for both trading operations and investment activities



These incentives together with non-tax incentives such as the economic and telecommunications infrastructure, the English speaking population and membership of the EU make Ireland one of the most attractive destinations in Europe for multinational companies.

One of the major advantages that Ireland has over other jurisdictions is the ability to combine the holding company with trading activities such as Shared Service Centre activities, GroupProcurement, Treasury and Research & Development. 

A holding company incorporated in Ireland must take one of the forms provided for by Irish company law. The most commonly used structure is a private limited liability company or a private unlimited liability company. There are no minimum equity requirements for an Irish private company. 

Financial statements must be prepared in accordance with generally accepted accounting practice in Ireland and with Irish corporate law comprising the Companies Acts, 1963 to 2012. The Companies (Miscellaneous Provisions) Act, 2009 (as amended) (the “2009 Act”) which was signed into law on 23 December 2009 permits certain parent undertakings to use US GAAP in preparing their accounts and was implemented to assist companies migrating to Ireland. 

The ability to use US GAAP is available to parent companies incorporated in Ireland where their securities are not traded on a regulated market in the EEA. The company's securities must be registered with or subject to reporting to the US Securities and Exchange Commission (SEC) and the company must not have incurred on 4 July 2012 an obligation to file accounts with the Registrar of Companies, or, alternatively it must have, on or after 23 December 2009 (but prior to 4 July 2012) used US GAAP in the preparation of its accounts in accordance with the provisions of the 2009 Act.


The Minister may also approve the use of other internationally recognised accounting standards in similar arrangements. The arrangements were originally to apply for a maximum of four financial years after the undertaking’s incorporation in Ireland and to expire on 31 December 2015 however the four year cap has been removed and the period extended to 31 December 2020. It is possible to establish an Irish tax resident holding company which is incorporated in another jurisdiction. For example, a number of UK groups have used Jersey incorporated companies and simply established the holding company’s tax residence in Ireland

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