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Starting a business in 2 countries

  • 31-03-2005 8:44pm
    #1
    skorn
    Closed Accounts Posts: 142 ✭✭


    2 partners starting a business (Ltd company).
    1 part will be in Ireland but the other is relocating to South Africa.
    The company will produce computer graphics as a service to clients.
    The partner in Ireland will also work on projects brought in by the "branch" in South Africa and vice versa.

    What is the best way to go about this?
    1) company based in Ireland with the 2 directors drawing a salary?
    what implications does this hold for the partner in South Africa?
    2) 1 company based in Ireland and another in South Africa?
    how do we structure this?
    how would finances/profits be distributed between both?

    Would appreciate any help
    Thanks


Comments

  • #2
    Victor
    Registered Users, Registered Users 2 Posts: 78,579 ✭✭✭✭Victor


    To be honest you are probably better off acting as two sole traders and sub-contracting work to each other.

    For corporate image, simply register trading names / trademarks.


  • #3
    skorn
    Closed Accounts Posts: 142 ✭✭skorn


    Victor
    Does running a sole-tradership prevent me from employing other for the company in any way?
    Registering a trade name? Registering it in both countries or registering an international tradename?


  • #4
    Banjo013
    Closed Accounts Posts: 168 ✭✭Banjo013


    Depends on a lot of things really.

    For ease of administration, I'd tend to register the company in Dublin and operate the South Africa division as a branch. You may be able to work it so that the guy working in Africa doesn't pay income tax - if he/she remains Irish resident but spends most of their time in Africa.

    This will mean that all your invoicing will have to go through Dublin. There's VAT implications there.

    You could go down the route of registering a company in each juristiction, making one or other of them a wholly owned subsidiary of the other. In a roundabout kinda way this would allow you to declare all the profits through the country with the lowest corp. tax rate. Basically if the Irish tax rate is 20% and the SA rate is 35% (for example), then the Irish company sends an invoice to the SA company for "management charges". You will have to justify the charges but that's not usually difficult.

    There's no one right answer to your question really ... it all depends on what suits your situation and requirements best.


  • #5
    antoinolachtnai
    Registered Users, Registered Users 2 Posts: 9,815 ✭✭✭antoinolachtnai


    You can't really trade in another country without being registered there. If you go the route Banjo described, you would also have to register a 'branch' in South Africa. The branch might have to file accounts in South Africa.

    Don't worry about the VAT. There are no real VAT implications one way or the other. If you had a company operating in both jurisdictions, you will have to register for VAT in both (assuming there is VAT in SA).

    Honestly, the advice to keep everything separate and subcontract to one another sounds like a good idea. Keep everything simple.

    The only exception to this is if you are going to be investing in promoting the brand or developing other intellectual property. If this is the case, you will probably need some sort of 'vehicle' to control the property, and it is worth setting this up properly. (Of course doing this doesn't prevent you from doing the subcontracting thing for all other work.)


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