A foundation in Ireland is generally registered with the purpose of developing non-profit activities. Under the Irish legislation, this structure is seen as a non-profit organization (NPO), which can be registered for mutual or public benefit purposes. Amongst the types of NPOs available in Ireland, besides the foundation, the legislation stipulates structures such as religious organizations, cooperatives, trade unions, self-help groups or residents’ associations.
In order to register an Irish foundation, its founders must select a specific legal entity; in the case of NPOs, only several options apply and our team of consultants in company registration in Ireland can provide assistance on the main options (and on the advantages/obligations deriving from these legal entities) available in this case.
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Steps to set up a foundation in Ireland
There are two ways to create an Irish foundation:
- by setting up a non-profit organization;
- by registering an Irish company.
After choosing the appropriate structure, the following steps must be completed:
- registration with the Companies Registrar in the case of business incorporation;
- registration with the Irish Charities Regulator, no matter the legal form selected.
Our company formation consultants in Ireland can assist with the registration with both authorities.
| Quick Facts | |
|---|---|
| Applicable laws | – Irish Nonprofit Law, – Charities Act. |
Types of foundations | – charities, – religious organizations, – cooperatives, – self-support groups, – residents’ associations. |
Legal forms | Foundations in Ireland can be registered as trusts, unincorporated associations, companies limited by guarantee. |
| Mandatory registration (YES/NO) | Yes. |
| Registration authority | The Irish Charities Regulator, the Revenue Services, and Companies Registrar in the case of companies limited by guarantee. |
| Creation document | The Constitutive Act, trust deed, Articles and Memorandum of Association, depending on the legal structure used. |
| Special requirements | Foundations set up as charities must appoint at least 3 trustees. |
| Local address required (YES/NO) | Yes. |
| Share capital requirement (YES/NO) | No, there is no need to have a specific share capital not even when registering a company limited by guarantee. |
| Taxation of foundations | Foundations benefit from several tax exemptions, including the income and corporate taxes. |
| VAT payment requirements | In certain cases, charities may pay VAT for the sale of certain products. |
| Accounting requirements (if any) | Yes, foundations must file annual reports of their financial activities. |
| Statuses of foundations | Irish foundations can be created for both public and private benefits. |
| Possibility to conduct economic activities through an Irish foundation (YES/NO) | Yes, certain activities are permitted to a foundation. |
| Support in setting up a foundation in Ireland (YES/NO) | Yes, our Irish company formation agents can help you create and register a foundation. |
Documents to file with the Charities Regulator
Registration with the Charities Regulator requires the submission of several documents, among which:
- the names and details of the shareholders/participants in the NPO;
- the constitutive documents and financial records (if available);
- a viable business plan that must contain cash flow predictions;
- details of the trustees;
- trustee declaration forms;
- the document covering the policy on conflict of interests;
- a declaration of eligibility for charity registration.
The registration procedure depends on various factors, among which the accuracy of the information and the number of applications which may delay the approval.
Our local specialists can offer more information about the paperwork necessary to register an Irish foundation with the Regulator. They can also help you set up a company in Ireland.
What are the main company types for Irish NPOs?
The Irish NPOs can be registered as companies limited by guarantee, trusts, incorporated associations, or as designated activity companies. The latter option is newer, as it was introduced under the regulations of the Companies Act 2014. All these company types provide the possibility of qualifying for a set of tax exemptions.
Requirements to create an Irish NPO as a limited company by guarantee
One of the main ways to establish a foundation is by setting up a company in Ireland. The preferred business form for its activities is the limited company by guarantee for which certain requirements must be met. Here they are:
- it must have at least one founding member who can be an individual or company;
- it requires a minimum number of 2 directors;
- it must also have a secretary (this office can be held by one of the directors).
The company must be registered with the Irish Companies Registration Office and its name must contain the Company Limited by Guarantee at the end.
The object of activity of the company must be related to charity and they must be set out in its Articles of Association.
If you want to create a foundation this way, our Irish company formation specialists can handle its incorporation on your behalf. Please find below our infographic:
Tax exemptions for Irish NPOs
An Irish foundation and other types of NPOs operating here qualify for a set of tax exemptions. Provided that the foundation develops a charitable activity (the term is defined under Irish law), it can benefit from an exemption on the following taxes: the corporate tax, the income tax, the capital acquisition tax, the withholding tax on dividends, the stamp duty and the deposit interest retention tax.
However, it is necessary to know that these types of structures are generally liable for the payment of thevalue added tax, but in specific cases, foundations and NPOs can be exempted from the obligation to pay this tax; our team of specialists in company formation in Ireland can assist with more details on the Irish tax system and can also present the tax requirements for charitable structures in this country.
When is an Irish NPO considered a charitable structure?
As stated earlier in this article, any Irish NPO can be founded for public or mutual benefit purposes. The statistics show that, in Ireland, most of the NPOs are established for mutual benefit purposes, which means that they are founded for the benefit of their members. As a general rule, foundations and Irish NPOs are set up as trade unions, political parties, professional bodies, recreation clubs, sports clubs, and others. In this situation, the structure will not be considered a charitable institution.
In order to gain the status of a charitable structure, it must be founded as a public benefit organization; a charitable structure is defined under the regulations of the Charities Act 2009, which stipulates that an NPO must develop various activities that are in the benefit of a community (reducing poverty, preventing poverty, investing in education and other similar purposes).
Here is also a video on Irish foundations:
How many charities operate in Ireland?
The Charities Regulator keeps track of all charities registered in Ireland, and the data for 2022 indicates that:
- there were 11,511 registered NPOs, covering small, large, volunteer, national, and international charities;
- there were also 76,399 charity trustees registered with the Regulator.
As presented above, an Irish NPO is generally incorporated as a company limited by guarantee, as this structure is specially created for this purpose. Besides this, it is not necessary to deposit a minimum share capital and the founders of the structure have the quality of guarantors and not shareholders.
In order to incorporate this type of company, its founders must sign the articles of association and the memorandum. Another similar option is the designated activity company, a business form that must be founded based on share capital; those interested in setting up a foundation in Ireland can contact our team of consultants in Irish company formation for advice on the advantages provided by these company types.