Provided a company has no presence in Ireland, does not own any property there, does not carry on any corporate activity there and is managed and controlled outside the Republic of Ireland, it will not be liable for any corporation tax in Ireland. Whilst every precaution has been taken to check the accuracy of the information contained in this fact sheet no responsibility will be taken for any inaccuracies contained herein.

   Submission of Memorandum and Articles of Association, together with a Form 1 detailing the first directors, secretary and situation of the Registered Office.

   There are certain restrictions regarding the trading, such as the company is not permitted to trade within Ireland. The company must not be managed and controlled outside Ireland and it cannot solicit funds from or sell shares to the public.

   A company incorporated in the Republic of Ireland has the same powers as a natural person.

   Disclosure of the true beneficial owner is required under the 1994 Finance Act unless the shares are held as part of the assets of a trust or by a company incorporated in a jurisdiction which permits the issuing of bearer shares. Annual returns and accounts, details of directors, secretary and shareholders are all filed with the Irish Registry and are thus available for Public Inspection.

   The concept of bearer shares does exist, but they are very rare because Central Bank consent is required before they can be issued, and such consent is likely to be refused. It is also believed that issuing bearer shares could affect the company’s status as a private company, provided that the appropriate objects are contained in the Articles of Association. However, the effect of a private company issuing share warrants to the bearer means that the company ceases to be entitled to the privileges and exemptions conferred on private companies - in that case it must have a minimum of seven members/shareholders and must file full shareholders accounts with its Annual Return in the Companies Registration Office.

   In the vast majority of cases documentation is prepared in the English language. It would be equally acceptable if prepared in the Irish language. If, however, it is prepared in a language other than English or Irish, an appropriate translation must be made and filed.

   No. To establish non-resident status the company’s shareholders should be non-residents. However, Irish residents may act as nominees for the non-resident beneficial owners of the shares provided that the appropriate documentation evidencing the trust is executed by the nominees. This is quite in order under Irish law. In this instance, details of true beneficial ownership will not be available as a matter of public record. C.I.S. can provide Irish resident nominees in the form of its trust companies. C.I.S can also provide “offshore” nominees as required.

   No. In fact, to establish non-resident status the directors and secretary must be non-resident and Irish resident individuals should be specifically excluded from acting as directors and secretary. A provision to this effect should be included in the company’s Articles of Association.

   These meetings must never be held in Ireland as this would jeopardise the company’s non-resident status for tax purposes.

   By law all companies, private and public, must have a minimum of two directors. Company’s Articles of Association may, however, provide for a higher minimum number. Irish company law does not provide for a maximum permissible number of directors but the company’s Articles of Association may do so. Details of first directors and secretary and any subsequent changes thereto must be filed with the Irish Registrar of Companies and are available as a matter of public record.

   The first Annual General Meeting should be held within 18 months of incorporation. Subsequent meetings should be held once in every calendar year, not more than nine months after a company’s year end and not more than eighteen months from the previous meeting.

   An Annual Return must be filed with the Registrar every calendar year. It must be made up to a date 14 days after the date of a company’s Annual General Meeting and must be filed within 60 days of the Meeting. An Annual Return records details of the company’s registered office, authorised and issued share capital, indebtedness in respect of registered charges, shareholders, directors and secretary. A filing fee of IR£10 is currently payable to the Irish Registrar of Companies in respect of this return.

   Most private companies are now required to file full or abridged accounts, as appropriate, with Annual Return. Private Irish companies which qualify to be treated as small or medium sized under the provision of the Companies (Amendment) Act, 1986 may prepare and file abridged, rather than full shareholders accounts with their Annual Returns.

   Every company incorporated in the Republic of Ireland is required to prepare and lay audited accounts before its shareholders at the company’s Annual General Meeting.

   The minimum number of directors is two. They must be natural persons. But they may be residents of Ireland or provide a bond to the value of £20.000.

   The minimum number of shareholders is one, is better to have two.

   Company secretary is required who can be a natural person or a body corporate. The company secretary need not be resident in the Republic of Ireland.

   The company must maintain a registered office in the Republic of Ireland.

   Abridged audited accounts are filed with the annual return. There is no requirement to file accounts with the Revenue Authorities, although the Revenue reserves the right to call for accounts, if it wishes so.

   The 1999 Irish Finance Bill introduces significant changes to the Non-Resident structure.

   Under the new measures Irish Non-Resident companies must have an Irish resident director or provide a bond to the value of £20,000 as a surety against its failure to comply with the new company law and tax requirements.

   The number of directorship that any one person can hold will be limited to 25. When applying to incorporate an Irish Non-Resident company, the authorities need to know the purpose/activities of the company.

   With effect of 12th February 1999, all new incorporations will be deemed to be resident for tax purposes. Companies incorporated before 12th February 1999 will remain Non-Resident only until 1st October 1999 wherefore they will also be deemed to be Resident. The standard rate of corporation tax for resident Irish companies is being reduced as follows: 1999 (28%), 2000 (24%), 2001(20%), 2002 (16%) and 2003 (12.5%).

   Irish Non-Resident companies will also be obliged to provide information on their affairs to the Revenue Commissioners. And in a new departure, these companies will be required to reveal the beneficial owners to the Revenue. The Revenue Commissioners will in turn be obliged to supply details of any companies which fail to comply with these requirements to the Registrar of Companies who may, where appropriate, strike them off.

   An amendment will provide that where a company fails to pay any penalties for failure to supply information or to file tax returns, these penalties may be recovered from the secretary of the company. If the secretary is not resident in the State, the penalties may be recovered from an Irish resident director of the company. And as a final, resort any penalties will be recovered from the £20,000 bond.

   Until very recently the Irish Non-Resident Company was one of the most common Offshore Corporate vehicles. However, in early 1999, the Irish Government passed new legal measures in order to regulate the activities of INRC companies. These new measures were enacted largely as a result of increasing pressure from the EC with regard to the operations of “Tax-Neutral”INRC companies within the EC. As a result of these new measures, an Irish company must conform to the following principal criteria in order to be legally classified as Non-Resident:-

1. Formal notification of Non-Resident Status , together with statutory company information, to be made to the Irish Revenue

   Commissioners (Irish tax authority).

2. The Beneficial Ownership of an Irish Non-Resident Company must be held in either another EC country, or in a country

   with which Ireland has a Double Taxation Treaty.

3. The Company must have some taxable activity in Ireland (in this case the company will be subject to Irish tax on its activities in Ireland, but the operations of the company outside Ireland will remain “Non-Resident” and therefore tax-free)

OR

   Many of our clients will be very concerned about the implications of the new 1999 Finance Act.

   The Irish Finance Act 1999 renders all new Irish companies tax resident with immediate effect, and all existing non-resident companies tax resident with effect from 1^st October 1999. There are, we believe, very good reasons why Ireland can continue to offer extremely tax efficient solutions to clients’ needs.

   The solution we believe clients will find very attractive is to allow the Irish non-resident company to become resident, but to have the Company execute a nominee or agency agreement with a new offshore company prior to this occurrence. This will leave only 5-10% of the trading turnover in the hands of the Irish company, and will effectively reduce the actual tax rate to between 1.4%-2.8%. As Ireland’s tax rate comes down over the next few years so too will this effective rate of tax.

   If certain criteria are met it is possible for a company to retain its existing non-resident status. The most attractive of these conditions allows a company to become tax resident in a jurisdiction with which Ireland has a suitable double tax treaty. By appointing a majority of Cypriot resident directors, for instance, the Irish-Cyprus double tax treaty will render the company liable to Cypriot tax at the offshore rate of 4.25% rather than Irish tax at 28%.

   A significant advantage of continuing to use your existing Irish Company rather than switching operations to a new offshore jurisdiction is that the trading partners of the existing companies are not affected in any way. Furthermore, existing banking relationships can be maintained, ensuring the minimum of disruption to the client and his operations.

   As Ireland’s corporate tax rate steadily decreases towards a rate of 12.5% by 2003, we are convinced that more and more international operations will be seeking to locate their activities in Ireland. Thus it makes sense for existing structures to be retained wherever possible in order to enjoy the growing respectability of Ireland as a jurisdiction of international quality and reputation.

   Whilst the Finance Act has now become law, a further piece of legislation – the Companies Amendment Bill – will make changes to the operation of companies in matters of directorships and other administration. This has yet to be debated in the Irish Parliament it may take some time to become law, so we believe that decisions have to be made now on the certain knowledge of the Finance Act. Arrangements for provision of directors, etc., can be made later.

    We are visiting and talking to as many clients as possible and helping to prepare them for the changes. Do please call us if you have any concerns.

   The Irish company would not be re-domiciled in one of the other jurisdictions.

   The new company would be incorporated (say BVI) and the Irish company would need to transfer the assets held to the new company for a consideration. The consideration can be of par value as long as the company is non-resident when the transfer takes place (prior to 1^st October if incorporated prior to 11^th February 1999).

   If the company is incorporated in the BVI and was trading in its own right, then it may be favourable to have a UK nominee company. The UK Company would provide the BVI Company with a right to use its identity and bank account, which would be particularly useful when dealing in Europe. The UK Company can also be registered for VAT.

   The transfer of assets from the Irish company to a new offshore structure, in whatever form this takes, must be achieved prior to the    1 October 1999. This is because under the proposed rules, Irish companies incorporated prior to the 11 February 1999 will remain non-resident up to and including the 30 September 1999 but after that date will become subject to Irish tax. As a resident company, tax consequences could apply to transfers of assets effected on or after 1 October 1999.

   Secondly, it is essential that a suitable recipient offshore vehicle is put in place to receive the transfer of assets.

   Set out below are Comed proposals for transferring the assets or undertakings of Irish companies to an alternative offshore structure. We propose four options, depending on the circumstances.

   Comed would recommend that this is the best technique where:

1. The company has a small issued share capital
2. The company has profits or reserves to distribute

   These can be dividend to the company’s shareholders without Irish tax consequences if the dividend is accomplished prior to the 1 October 1999. If the dividend is paid on or after this date, then Irish dividend withholding tax will apply. The dividend withholding tax rate will be 24% of the gross dividend.

   However if the dividend is paid before the 1 October 1999, then the dividend will escape all Irish taxation even if paid to an offshore company.

   Our recommendation is that where the shares of the Irish company are held by in-house nominee shareholders the nominee shareholders transfer the shares of the Irish company to an appropriate offshore vehicle which can receive the dividend proceeds as beneficial owner. Suggested locations for the new shareholder are referred to below.

   An alternative approach to dividending the profits or reserves of the company followed by strike off, would be to liquidate the company, advancing proceeds to the shareholders. Again it will be necessary to ensure that there is a suitable offshore entity to receive the liquidation proceeds.

   We prefer the dividend route to the liquidation route because a transfer of assets by way of dividend will be quicker and cheaper. Nevertheless liquidation is another option that Comed can implement for you.

   An alternative solution is to sell the entire assets and undertaking of your Irish company to another offshore company for a nominal consideration of £1, after which the Irish company could be struck off the register.

   In this scenario we would recommend that the Irish company is converted to an unlimited company so that its assets and undertaking can then be distributed to a suitable offshore shareholder by way of reduction of capital. An unlimited company will not need to apply to the Irish courts to effect this procedure.

   Again, where in-house nominee shareholders currently own the shares of the Irish company on behalf of the beneficial owner or his/her agents it will be necessary to transfer the shares in the first instance to a suitable offshore vehicle which can then receive the assets of the company in a beneficial capacity.

   Comed recommend the incorporation of a British Virgin Islands IBC company to receive the assets.

   Where it is important to operate with a company with a privileged status within the European Union we would recommend that in addition to incorporating the low-cost IBC, a UK company is incorporated as the nominee or agent of the offshore entity. Although this requires two companies to do the job that the Irish non-resident company used to do on its own, we are pleased to be able to offer clients a special package price.

   Furthermore you should note that unlike the Irish non-resident company, neither the UK nominee company nor its British Virgin Islands IBC principal, require accounts to be audited and overall there should be no significant increase in the annual running costs.

   Enclosed is a diagram illustrating the principles under which UK nominee companies operate. It is a widely used and very successful concept.

   (1) For a copy of a full set of documents to be made apostille in the jurisdiction will cost a minimum US $