How a German GmbH Can Set Up an Irish Subsidiary

Decide if a subsidiary is preferable to a branch

A subsidiary is a new Irish company that can hold assets and contract in its own name. A branch is an Irish establishment of the existing German GmbH, not a second legal person. The CRO says an EEA company that establishes a registrable branch in Ireland uses Form F12 with supporting corporate documents. A new Irish LTD instead uses Form A1 and a constitution.

A GmbH with only Irish customers may not need either an Irish subsidiary or a registrable branch. Conversely, Irish staff, premises, management, regulated activity or a permanent sales operation can justify a closer look at the right structure. Take Irish and German advice before using company formation as a substitute for this commercial decision.

Prepare the GmbH as corporate shareholder

Record the GmbH's exact legal name, Handelsregister details, registered office and authority for the person signing the Irish incorporation documents. Decide the shares and voting rights the GmbH will take, and keep the Irish company's register of members consistent with Form A1. The German company's managing director does not automatically become a director of the Irish subsidiary; that appointment is a separate choice.

The Irish RBO looks through corporate owners to the relevant natural persons who ultimately own or control an Irish entity. The RBO says a subsidiary of a foreign parent still files its own beneficial-ownership information. Prepare an ownership chart through the GmbH and any higher companies, including voting rights and other control arrangements.

• GmbH registration, legal name and signatory authority.
• Proposed Irish share class and initial subscriber details.
• Names and real residence of proposed Irish directors.
• Separate secretary if the Irish LTD has one director.
• Ownership chart through to natural beneficial owners.

Use the German director-residence position correctly

The CRO normally requires at least one director of an Irish company to reside in the EEA. Germany is in the EEA, so a director genuinely resident there can usually meet the rule without a Section 137 bond. German citizenship alone is not the test if a proposed director actually lives outside the EEA.

Directors have real Irish company-law duties and should be appointed for governance, not only for their address. An Irish LTD can have a single director, but a sole director cannot also be the company secretary. If the qualifying director later leaves or moves outside the EEA, reassess compliance before that change takes effect.

State the Irish activity and location honestly

The CRO says a company cannot be incorporated unless it appears it will carry on an activity in Ireland. Form A1 asks for the general nature of the activity, an appropriate NACE classification and the place in the State where it will be carried on. An Irish registered office is required, but a professional address alone is not evidence that the subsidiary has staff or management there.

Describe the actual planned Irish role: local contracts, service delivery, employees, property, IP holding or another lawful activity. Where the German team will perform most work remotely, document which company bears the commercial risk and which entity owns the contracts. Avoid presenting a mail-handling address as an operating centre.

Separate tax residence from the place of incorporation

Irish Revenue generally treats a newly Irish-incorporated company as tax resident in Ireland unless a double taxation agreement treats it as resident elsewhere. Germany's federal guidance says corporations with a registered office or management in Germany can have German tax obligations on worldwide income. The place where significant management decisions are made therefore matters to a group run across both countries.

Get advice on the Ireland-Germany treaty, any German permanent establishment, Irish tax registration and the people who will manage the subsidiary. Document board decisions and actual operations rather than assuming that an Irish certificate fixes the tax result. German payroll or social-insurance duties may also arise if the Irish company employs people who work in Germany.

Document group services, funding and goods

If the GmbH provides engineering, management, software, loans or stock to the Irish LTD, decide the legal supplier, recipient and contract terms. Revenue's transfer-pricing guidance explains that related-party transactions are generally tested against an arm's-length standard. Do not move costs or income between the two companies simply to change the reported profit location.

VAT treatment depends on the type of supply and where the customer or goods are located. B2B services may follow place-of-supply and reverse-charge rules; goods moving between Germany and Ireland may need intra-Community supply or acquisition accounting and transport evidence. Each company needs its own accurate records and the correct registrations.

Formation and first-year action plan

Start with a structure and tax review, then approve the GmbH's shareholding, Irish officers, registered office and intended activity. Prepare the name, Form A1 and constitution and file the Irish incorporation. After the CRO number arrives, organise share records, RBO filing, banking, tax registration, intercompany agreements and the first annual return calendar.

StartCompany.ie can assist with the Irish formation. A German-resident director may make a resident package suitable, but the right package depends on address, identity and filing needs. Compare the current package scope and total payable price rather than assuming formation includes German tax advice or branch registration.

• Choose subsidiary, branch or direct cross-border sales.
• Confirm GmbH ownership and signing authority.
• Appoint Irish officers and arrange a genuine Irish activity and address.
• File Form A1 and organise the Irish statutory records.
• Complete RBO, tax, banking and intercompany work.
• Calendar both countries' ongoing compliance.