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IT Contracting Business in Ireland or Offshore

IT Contracting Business in Ireland or Offshore

Old May 11th 2023, 4:42 am
  #1  
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Lightbulb IT Contracting Business in Ireland or Offshore

Hi everyone,

My whole family (two adults and two kids) will be moving to Ireland next year, and we have some questions about doing small business and saving tax in Ireland. Basically, I have around 15 years of experience in the IT industry, and I've been tired of working as an employee, so I switched to working as an IT contractor (sole trader or self-employment) for my previous employer in the UK. As we know, in Ireland (I guess this applies to most countries), sole traders and limited corporations involve different business tax rates, so I'm wondering if I can somehow get the limited corporation's tax by setting up a UAE offshore company while I'm living in Ireland.

The original plan for the offshore company was:
1) First, I will need to register a corporation in one of the Free Zones in UAE (this step can be done remotely);
2) I will sign a contract with the UAE corporation and work as a full-time employee remotely from Ireland;
3) The clients (or my previous employer outside of UAE) will sign a contract directly with my UAE corporation rather than myself, and then I'll finish the task as a remote employee of the UAE corporation;
4) Since the UAE didn't charge any corporation tax for overseas income, I'll only need to pay personal tax in Ireland when I receive my monthly salary from the UAE corporation;

Another more 'traditional' approach to setting up IT contracting business is:
1) First, I will register a local Irish IT corporation while I'm living in Ireland;
2) I will sign a contract with this local corporation and work for it as a full-time employee; (actually, it only has one employee)
3) The client (or my previous employer outside of Ireland) will sign a contract directly with my local Irish corporation rather than myself, and then I'll finish the task as a local employee of the Irish corporation;
4) Irish corporation tax for small businesses is around 12.5%, so I have to pay that much from my business account every year;
5) Then, I'll also need to pay monthly personal tax on my salary income.

Obviously, the second plan is expensive and seems a bit tricky. Does anyone have any idea if the first plan works? Is that legal? I know the first person I should contact is a tax advisor or accountant. Yes, I did check with a few, but they either only know Irish tax rules or the UAE tax rules but not both, so they couldn't provide a clear answer. Can anyone here share your thoughts?

Thanks in advance!
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Old May 11th 2023, 7:13 am
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Default Re: IT Contracting Business in Ireland or Offshore

Can't help with this setup myself but as you say, might makes sense to contact tax advisors. Maybe the bigger ones like PWC could help, I'm unaware of their costs though.

https://taxsummaries.pwc.com/ireland...rporate-income

https://www.tmf-group.com/en/news-in...e-zone-person/
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