1. Legal System
1.1 Legal System and Judicial Order
The judicial system in Ireland is established by the Constitu¬tion, the principal courts being the District Courts and Cir¬cuit Courts (with limited jurisdiction), the High Court (with unlimited jurisdiction in civil and criminal matters), the Court of Appeal (with appellate jurisdiction) and the Supreme Court (which usually exercises final appellate jurisdiction only). The judiciary is independent of the legislature and the executive.
Ireland is a member state of the EU and the United Nations. The Irish legal system is similar in many respects to that of the UK and the US. Irish law is based upon common law, statute and the Constitution of Ireland. The EU also represents an important source of Irish law and decisions of the EU Court of Justice exercise significant influence over Irish law.
2. Restrictions to Foreign Investments
2.1 Approval of Foreign Investments
Foreign investments are not subject to any particular approval requirements and there is no overarching FDI screening frame-work. Investment, whether foreign or domestic, in certain sec¬tors such as banking, financial services, media and telecom¬munications may attract regulatory scrutiny.
Ireland is subject to the EU FDI Screening Regulation (2019/452/EU) (the "FDI Regulation") which will apply from October 2020. The FDI Regulation co-ordinates the scrutiny of investments by non-EU countries to ensure that those invest¬ments do not threaten security or public order. The focus will be on areas from critical infrastructure to free press.
Ireland will not be obliged to establish an FDI screening frame¬work but other EU member states and the Commission will be able to request information from, and provide comments or an opinion to, Ireland on investments where security or public order are at stake.
2.2 Procedure and Sanctions in the Event of Non-compliance
There are no general requirements under Irish law for foreign investors to obtain investment approval.
2.3 Commitments Required from Foreign Investors
Irish authorities impose no specific commitments on foreign investors in relation to their investments.
2.4 Right to Appeal
In general terms, Irish authorities cannot block foreign invest¬ment, so there is no need for recourse to the various appeal mechanisms available under Irish law.
3. Corporate Vehicles
3.1 Most Common Forms of Legal Entities
The Companies Act 2014 provides for various types of corporate vehicles that may be created in Ireland. A company of any type may be incorporated with a single shareholder.
Company Limited by Shares (LTD)
The LTD is the model form of private company limited by shares and is the most common form of corporate vehicle used by for-eign investors. The LTD has the same unlimited legal capacity as an individual. It has a one-document constitution and its internal regulations are set out in simplified form in that con¬stitution. An LTD is prohibited from offering securities (equity or debt) to the public.
Designated Activity Company (DAC)
The DAC is an alternative form of private limited company. A key distinction between a DAC and an LTD is the existence of an objects clause in the DAC constitution. A DAC may be a suit¬able vehicle where an objects clause is needed (eg, to restrict the corporate capacity of a joint-venture vehicle) or for companies listing debt securities on a stock exchange.
Unlimited Company
The Companies Act recognises three distinct types of unlimited company:
- the private unlimited company with a share capital (ULC);
- the public unlimited company with a share capital (PUC); and
- the public unlimited company without a share capital (whose liabilities are guaranteed by its members) (PULC).
Members of an unlimited company may be held liable on an unlimited basis for the debts of the company in the event of it entering insolvent liquidation. ULCs may not offer for sale or list any new securities, as is the case for an LTD, but a PUC and PULC may list debt securities.
Public Limited Company (PLC)
The key distinction between PLCs and private companies is that only PLCs may list their shares on a stock exchange and offer them to the public. A Societas Europaea (SE), the European model company, is regarded as a PLC under the Companies Act. It must have a minimum issued share capital of EUR25,000.
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Originally published August 24, 2020.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.