Irish Limited partnership
Tax planning Advantages

In general, Ireland is a jurisdiction with a standard level of taxation. However, Irish legislation provides the opportunity for registration and operating of companies with a zero rate of tax – the Limited Partnerships (L.P.).

An Irish L.P. with foreign members, which does not carry on a business in Ireland and derives no income on territory of Ireland, is not liable to tax in Ireland. According to the tax laws of Ireland, a L.P. is not considered as a separate subject of taxation. The founders should pay taxes from the profits received by the L.P. in their place of residence in proportions according to their share of interests belonging to them in the L.P.

As an example, an Irish L.P. with a General Partner resident in offshore, such as in the Seychelles, and which receives the income only outside of Ireland, will not be assessed for tax. Taxes will be paid by the members in the country of their residence if it is stipulated by the legislation of that specific country.

The favourable tax regime of L.P. companies does not eliminate the requirements for preparation of financial statements. Every L.P. is obliged to prepare financial statements, and the relevant Partnership Tax return must be filed annually with Irish Tax Revenue.

The Irish Partnership Act

Foreign investors who intend to open companies in Ireland have a wide variety of business structures to choose from. Among the types of companies available for registration in Ireland are also partnerships. The legislation distinguishes between several types of Irish partnerships:

– general partnerships,
– limited partnerships,
– investment limited partnerships.

The general partnership in Ireland falls under the regulations of the Partnership Act of 1980. General partnerships offer different advantages to foreign investors starting with tax benefits and less disclosure requirements. If you need assistance to start a general partnership you can request the services of our Irish specialists in company formation.

Setting-up a General Partnership in Ireland

According to the Irish legislation, a general partnership can be set up by at least two private individuals or corporate entities. The maximum number of partners in a general partnership in Ireland is 20. However, there are cases in which exceptions are made and the number of partners can sensibly grow. The creation of an Irish general partnership resides in a partnership agreement that can be concluded orally or in written. Most of the times the written form of the agreement is used.

General partnerships in Ireland can be divided into:

– informal partnerships concluded for an indefinite period of time,
– formal partnerships for limited periods of time.

The general partnership can carry one of the partners’ surname or have a different business name which will be registered with the Irish Trade Register. The liability of partners in an Irish general partnership is unlimited, considering the business entity has no separate legal personality from its owners. In case you are interested in setting up this type of partnership, our Ireland company formation agents can help you. Businessmen interested in setting up this business form in other European country, such as Slovenia, can be put in contact with our partners who are experts in company formation matters in Slovenia.

General Irish Partnerships
Taxation

From a taxation point of view, the Irish general partnership is a very advantageous type of company. Even if the partnership must register for taxation purposes with the Revenue Commissioners, each partner will receive a different tax registration code and thus will be taxed individually on their incomes.

For complete information about the advantages of opening a general partnership in Ireland, do not hesitate to contact our Irish company formation agents. You can also rely on our specialists for tailored accounting services.

Irish Limited Partnerships

A limited partnership must consist of at least one general partner and at least one limited partner. The partnership should not consist of more than 20 persons or, if carrying on the business of banking, no more than 10 persons.

The general partner has unlimited liability. The limited partner has limited liability since his liability is limited to the amount of capital contributed by him to the firm.

The role of the limited partner is similar to that of a shareholder in a limited company because their liability is limited to the capital that the partner has contributed, and they have no role in the management of the firm and have no power to bind the firm. The partnership is managed by the general partners who are liable for all debts and obligations of the partnership.

The Irish Limited Partnership
One of the Best Tax Planning Solutions

No residency requirement for partners
Corporate entities can act as partners
Minimal contribution by each partner can be as low as 1 euro
No requirement for the contributions to be paid up
Partnership does not pay corporate tax in Ireland if its partners are not Irish residents and the partnership’s activity is outside of the jurisdiction

An Irish L.P.is the ideal solution for those who prefer to operate with an EU-registered entity but to have at their disposal a fully tax-exempt vehicle at the same time.

Given the above-stated advantages, Irish L.P. companies are very popular tools for conducting international business.

In Ireland there are certain obligations, including preparation of financial statements, which must be fulfilled by every type of company, including a L.P.

The favourable tax regime of a L.P. is based on its “pass-through” status in that all profit received by the L.P. is considered to be transferred to its partners. Accordingly, if the partners are resident in a taxpaying jurisdiction, they will be obliged to pay tax in their country of residence proportionally to their share of participation in the Limited Partnership.