It seems that we have been talking about the looming shadow of Brexit for many years at this point. Now that there is finally a set date, it may seem that there is still very little information available for Irish companies with ties to the UK, so today we will focus on some possible implications of Britain’s upcoming exit from the European Union for Irish companies to enable you to best prepare and secure your company.
The United Kingdom (UK) is now set to leave the European Union (EU) on March 29th 2019 and there are many ways in which this could have implications for many Irish companies with ties to the UK. The main implication from the outset will be that the UK will no longer be part of the European Economic Area which may cause a number of shifts for Irish companies.
EEA Resident Director:
Under the Companies Act 2014, all Irish companies are required to have at least one director who is resident in the European Economic Area. Any companies who have directors ordinarily resident in the United Kingdom will be required to appoint a director who is resident within the EEA, or to take out a Section 137 Insurance Bond against non-compliance until they are fully compliant with this rule. It is suggested that this be done immediately to avoid issues.
There may be a loophole available should the director have a “real and continuous link to the State of Ireland”. These specifications must already be met and will not be satisfied on the basis of future intent.
Exemptions for Irish Subsidiaries:
In certain cases, Irish subsidiary companies may not need to file ‘Individual Entry Financial Statements’ with their annual return. This applies only to Irish subsidiaries held by holding companies under the laws of an EEA country, and in no other circumstance. If the subsidiary is held by a UK holding company, this will not apply.
Changes to Year End:
Under current Irish law, a company can change their financial year end date once every 5 years. Currently, if the aforementioned company is part of an EEA multi company structure, the financial year end dates of all companies can be aligned. This will no longer be applicable to company structures which include a UK company.
Many UK companies have registered an ‘Irish Branch’, which would naturally be a branch of an EEA company. Following Brexit, this will no longer be applicable and the Irish branch will find itself subject to stricter filing rules.
Imports and Exports:
This is arguably the most crucial item for Irish companies with links to the UK. It will be required post-Brexit for all companies importing or exporting goods into or out of the European Union to have an Economic Operators Registration and Identification Number (EORI). This will be essential for customs purposes and it is advised that all companies with trade links to the UK ensure that they have this ready.
As we have stated in the past, the future post-Brexit is uncertain but does not need to be clouded in doubt and negativity. The above issues are important to be aware of so that you can safeguard your business in these uncertain times, but many businesses can continue to thrive in this new environment without the assistance of our closest neighbours.
As always, we here at EcovisDCA are ready and waiting to assist you with any issues you may have on any business or financial matters and we look forward to continuing our relationships with all our clients and friends.
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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY