Export and Import

The Irish market for almost any product or service is so small that, if you want to grow a business of any significant scale, you will need to look for markets and customers outside Ireland.

To do this you will have to know how to prepare export documents and apply for licences where required. If you don’t know these things you will risk delivery and payment delays, or, worse still, non-payment.

International Commercial terms (INCOTERMS 2000) , International Chamber of Commerce publication, www.iccwbo.org ) provide globally recognised rules for the interpretation of themost commonly used trade terms. The basic purpose of each INCOTERM is to clarify how functions, costs and risks are split between the buyer and seller in connection with the delivery of the goods, as required by the sales contract.

There is an extensive array of official documents that you need to be familiar with if your business will be exporting goods. You must also allow for the additional costs that are involved in an export shipment, whilst making sure that the sale is still competitive. Most of all, you must be fully satisfied with the credit worthiness of your overseas customer, and you should minimise the payment risks by the use of secure international payments through the banking system, such as advance payment transfers, Letters of Credit, or Credit insurance.

Customs

Customs formalities have to be properly adhered to for all consignments coming into or leaving ireland from countries outside the EU.

Freight forwarders provide an efficient logistics service to their clients for getting goods to overseas markets. The freight forwarder acts as professional intermediary between the client and the carriers. They provide services such as
consolidation, handling, packing, storage, picking and distribution of goods. However, they can only act as agent for the Principal Shipper, who remains fully responsible for legal requirements, proper documentation, customs clearance and duty payments, etc.

Expertise in shipping services, customs duties and border controls on import or export are the main attributes of an effective freight agent, who may also be acting for the carrier. Understanding how international conventions and
agreements impact on shipping, the structure of customs tariffs and declarations are critical for correct customs duties calculations.

The Automated entry Processing (AEP) System from the Revenue Commissioners facilitates customs import and export procedures, and the clearance of import and export documents. Manual customs documentation is currently being phased out. Freight Forwarders can ensure speedy and successful customs clearance, calculation of VAT and Customs duty and prompt payment to Customs and Excise, thus avoiding extra costs or penalties.

Further information and support is available from the irish exporter’s Association www.irishexporters.ie

Professional Advice

The following pointers are designed to steer you in the direction of finding appropriate professional legal, accounting and taxation advice to help you set up a new business.

The internet holds a vast resource of information on every aspect of establishing a business, and may even offer advice of direct relevance to your own business idea. Be careful when using the internet, however, that the business information you are accessing is reliable, up to date, and relevant to business in ireland.

You will find the following websites useful for guidance and assistance in forming your business:

• Business Access to State Information and Services (www.basis.ie)
• Companies Registration Office (CRO) (www.cro.ie)
• Six things every director should know (www.cro.ie)
• Revenue (Starting in Business) (www.revenue.ie)
• Office of the Director of Corporate Enforcement (www.odce.ie)

You may also find it useful to refer to the professional associations representing accountants, including the Institute of Certified Public Accountants(www.cpaireland.ie), and the institute of Chartered Accountants (www.icai.ie). 

Business Name

Once your Business Plan is in order, one of the first things that you will want to consider is your business name. Whether you are going to trade as a Sole trader, in a Partnership or as a Limited Company, the name is important. Business names come under the Business names Act 19 (www.cro.ie).

If you trade under anything other than your own name (names in case of partnership, including corporate names), you must register that name with the Company Registration Office (CRO). Your choice of business name may be refused by the CRO if it is identical to or similar to a name already appearing on the register, or if it is deemed offensive, or it would suggest state sponsorship. The mere registration of the name does not confer a monopoly of that name. (See leaflet # 1 CRO). Further protection can be secured by registering the name as a trade mark.

Limited Partnerships (see below) formed under the 19 Act using a business name other than the partners’ names must also register under the Business names Act 1963 .

Business Structure

• Sole Trader -With some exceptions (department of trade and employment; www.entemp.ie) most people can set up in business. the simplest form is as a Sole trader (ST) either under your own name or trading under a registered
  business name (see above).
• Partnerships (Partnership Act 1890) - there are two distinct categories of partnership, a General and a Limited Partnership. Partnerships are formed between people who wish to trade in a business venture together under
  the terms of a partnership agreement, which will detail the rights and obligations of each partner and the manner in which profits will be allocated. A partnership is not a separate legal entity in itself, even though partnerships
  are usually referred to as a ‘Firm’, as each partner is liable for the debts and obligations of the partnership, subject to the agreement or as detailed below for a Limited Partnership.
• General Partnership - A General Partnership is one where at least two, and not more than twenty, form an alliance to trade together. As far as the number of permitted partners, there are some exceptions relating to Banking, investment and Loan enterprises. (Check with CRO)
• Limited Partnerships - A Limited Partnership is one where there must be at least one General Partner, who is responsible for all debts and obligations of the firm, and other partner(s) who have limited liability subject to the
  amount of capital introduced to the firm and subject to the terms of the Partnership Agreement. A Limited Partnership must be registered with the CRO. Partners pay tax on their portion of the partnership profits after
  deduction of all allowable expenses.
• Private Companies - Limited Companies are formed under the Companies Acts 1963-2006. There are four types of Private Company -
  • Private, limited by share capital
  • Singlemember private limited by capital. (Must have two directors)
  • Unlimited company
  • Guaranteed company without share capital

For details of the above structures, the various filing returns, and other statutory requirements see www.cro.ie

Every company must have at least two directors (one can be a body corporate) and at least one must be an Irish National.

Directors must be registered for PAYE/PRSI on their salary and any dividends paid to directors on their shares are treated as their personal income and are taxed in the normal way with allowance being made for any Withholding tax (WHT) already deducted.

A director does not have to be a shareholder or work full-time in the business. (For directors’duties see www.odce.ie and for who can be directors see www.cro.ie).