How to Register as a Sole Trader in Ireland

With its winding Atlantic coastline and idyllically picturesque country, Ireland is one the main attractions in Europe. However, Ireland also boasts a highly developed knowledge economy, ranking 4th in the global GDP per capita tables. It is proving to be an important economic force, a hub of various professions, enticing entrepreneurs to start their businesses there.

Therefore, if you are interested in setting up a business in Ireland, this is the article for you.

When starting a business in Ireland, there are three possibilities, either as a sole trader, partnership or limited company. In further text, we will take a look at what it is like starting up as a sole trader.

Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.

Sole traders in Ireland

Starting a business can certainly be a daunting task. However, setting up as a sole trader is fairly straightforward in Ireland. There are no financial statements, no accounts audits, and no legal requirement for a sole trader to engage an accountant or tax advisor. Registration for taxes and filing of tax returns can be completed by the business owner if they are comfortable with the process and understand accounting and taxation systems and legal obligations and requirements.

Since sole traders are not legal entities, they retain all profits except tax, and are personally liable for their own debts. They are fully liable for their obligations. The law does not distinguish between business and personal assets in matters of liability. In conducting business, sole traders make their own decisions, at their own risk and for their own benefit.

Non-residents of Ireland, which are  EEA or Swiss nationals, are entitled to come and work in Ireland either as employed or self-employed persons. EEA and Swiss nationals do not need permission to establish a business in Ireland and they do not require a visa to visit, travel to, live or work in Ireland.

UK citizens have the right to work within Ireland, including on a self-employed basis.

There are two ways in which non-EEA nationals can invest or start a business in Ireland: Immigrant Investor Programme and Start-up Entrepreneur Programme.

Before starting a business, non-residents are required to obtain a Personal Public Service Number. A PPSN is a unique reference number which helps workers access social welfare benefits, public services and information in Ireland. To get a PPS number you have to show that you have a need for it. A Sole Trader income tax registration in Ireland can be used as evidence of this. To get a PPS number apply with the Welfare office.

Business name registration

You may decide to use your own name as the business name, but if you wish to use a separate business name you must register the name with the Companies Registration office.

To register a business name, the form required is a RBN1 form (Registration of Business Name). To register online, individuals would need to set up an account online through CORE on the Companies Registration office website and complete and submit the form online.

A manual form can also be completed and sent to the company's office in Carlow for processing. This process normally takes up to 5 working days. You will then be issued with a certificate of business name which should be kept on the business premises.

There is a filing fee of €20 if you register the business name online and €40 if filed manually.

If you're not looking to become an independent contractor, but hire one - learn how you can do it compliantly in Ireland.

Registration with Irish Tax Authorities

Individuals are required to register for Income Tax from the date of the commencement of the business. Registration can be completed online for all taxes through the Revenue Online System (ROS). Alternatively, you can complete a manual Form TR1 and send it to your revenue district for processing. You will receive a “Notice of Registration” confirming that you are registered for income tax.

Depending on the business and the turnover, a sole trade may also be required to register for Value Added Tax (VAT). If registered for VAT, the business will add VAT to the sales price of its goods and/or services. The rates of VAT are the standard rate (23%) or reduced rates (9% and 13.5%) and Zero Rated (0%). There are also low rates for Flat Rate Farmers.

Similar to registering for income tax, registration for VAT can be done online through ROS or manually using a TR1 form. VAT registered persons are obliged to file returns on or before the 23rd of the month following the period end. The VAT period is generally bimonthly, quarterly, and annually or biannually.

If individuals are self-employed they pay Class S PRSI contributions. This entitles them to a limited range of social insurance payments. Class S PRSI contributions are paid at a rate of 4% on all income or €500 whichever is the greater. If you earn less than €5,000 from self-employment in a year you are exempt from paying Class S PRSI but you may pay €500 as a voluntary contributor.

When sole traders register with Revenue they are automatically registered for Class S PRSI.

Insurance

Although sole traders are not legally obliged to be insured when they are carrying on a business, it is generally advisable to have insurance cover for various situations. In particular if the public has access to your premises you should have public liability insurance.

You may also want to look into other types of insurance such as health insurance. The Irish Insurance Federation provides a free insurance information service where you can obtain information and advice on all aspects of insurance.