Banks & Finances Ireland

Bank of Ireland

One of the largest banks in the country, offering a wide range of services for individuals and businesses. It provides a convenient account opening process for non-residents, including an online application and support in English. The bank also offers internet banking and a mobile app, making financial management easier for foreign clients.

 

Allied Irish Banks (AIB)

Actively works with foreign clients, offering a straightforward account opening procedure. The bank provides internet banking services, mobile apps, and multilingual support, making it attractive for immigrants; it also offers special service packages for students and young professionals, including foreigners.

 

Permanent TSB

Offers current accounts with low fees and a simple opening process for non-residents. The bank provides internet banking services and a mobile app, along with customer support in English. A notable feature is the cashback program for using debit cards, which can be beneficial for new clients.

 

EBS

Previously known as a building society, it is now part of AIB and offers current accounts with minimal fees. The account opening process for foreigners is simplified, and the bank provides access to internet banking and a mobile app.

 

N26

A German online bank available in Ireland, offering a fully digital account opening process via a mobile app. The bank provides multi-currency accounts, low fees for international transfers, and a user-friendly interface in English; suitable for those who prefer managing their finances online without visiting branches.

Opening a bank account in Ireland is an important step for immigrants, allowing them to receive salaries, pay bills, and manage personal finances. The account opening process may vary depending on the chosen bank, but the general requirements and steps are similar:

 

Choosing a bank: It's recommended to study the service conditions, fees, and branch availability to choose the most suitable bank.

 

Gathering required documents: To open an account, the following documents are usually needed:

- Identification: A valid passport or national identity card.

- Proof of address: A utility bill, rental agreement, or an official letter confirming your current address in Ireland.

- Personal Public Service Number: Required to receive social services and employment in Ireland.

Note that some banks may request additional documents such as an employment contract or a letter from your employer.

Scheduling an appointment at the bank: Many banks require an appointment to open an account. This can be done through the bank's official website or by phone.

Visiting the bank branch: At the scheduled time, visit the bank branch with the prepared documents. A bank employee will help fill out the necessary forms and explain the service conditions.

Waiting for card issuance and account activation: After submitting all documents and signing agreements, issuing a debit card and activating the account may take from a few days to a week. The card and PIN code are usually sent by mail to the address you've provided.

Features for foreign citizens

Lack of address proof: If you do not have address proof in Ireland yet, some banks may accept a letter from your employer or educational institution confirming your residence. Alternative options are also possible, such as a letter from the person providing you accommodation, accompanied by a copy of their utility bill.

Online banking: Some banks, such as N26, offer a fully online account opening process, which can be convenient for newcomers. However, such banks may have certain limitations and requirements.

Finding a suitable ATM

ATMs that accept international cards are widely available in Ireland. Make sure the ATM supports your payment system (Visa, Mastercard, UnionPay, etc.). Some ATMs may charge an additional fee for using foreign bank cards.

 

Commission Check

Before traveling, check with your bank the conditions for withdrawing cash abroad, including possible fees and limits. Pay attention to possible fees from the Irish bank servicing the ATM.

 

Recommendations

Avoid Dynamic Currency Conversion (DCC): When withdrawing cash or paying for purchases abroad, you may be offered to convert the amount into the currency of your card at the rate set by the acquiring bank. This rate is usually less favorable than your bank's rate. It is recommended to choose the option without conversion to avoid additional costs.

Use cards with minimal fees: Some banks offer cards with low fees for cash withdrawals abroad. For example, the Revolut card in Ireland allows cash withdrawals without fees within a set limit.

Plan cash withdrawals in advance: Withdraw larger amounts less frequently to minimize the impact of fees.

Bank Transfers (SWIFT)

Traditional banks offer international transfers through the SWIFT system. To send funds, you need to provide recipient details, including IBAN and the bank's SWIFT/BIC code. Commissions for such transfers can be high, and the execution time ranges from 1 to 5 business days.

 

Online Money Transfer Services

Modern online platforms offer faster and more economical ways to send money abroad:

- Wise: Provides transfers at real exchange rates with low fees. Suitable for sending funds to bank accounts in more than 80 countries.

- Paysend: Allows sending money to bank cards and accounts in more than 170 countries with a fixed fee. Transfers are usually credited within minutes.

- Profee: Provides fast transfers without hidden fees. Supports transfers to Visa, MasterCard, and bank accounts.

 

Money Transfer Systems

Companies like Western Union and MoneyGram allow sending cash, which can be collected by the recipient at service points worldwide. Commissions and exchange rates may be less favorable, but funds are available to the recipient within minutes.

 

Mobile Apps and Digital Banks

Some digital banks and apps offer international transfers with minimal fees: Revolut provides the ability to send money abroad at interbank rates with low fees. Supports transfers in more than 30 currencies.

Mortgages

 

Irish banks provide mortgages to foreigners but with certain restrictions:

- Loan amount: Typically, foreigners are offered a mortgage of up to 65–70% of the property's value.

- Debt-to-income ratio: The maximum loan amount is 3.5 annual incomes of the borrower.

- Income requirements: The borrower must have a stable income and provide supporting documents, such as bank statements and tax returns.

- Credit history: A positive credit history in Ireland or the country of residence increases the chances of mortgage approval.

- Residence permit: Some banks may require a residence permit or work permit in Ireland.

 

Consumer Loans

 

Obtaining a consumer loan for foreigners is also possible, but banks have strict requirements:

- Credit history: A positive credit history in Ireland is a key factor.

- Stable income: Banks require proof of stable income and employment in Ireland.

- Residence permit: Having a long-term residence permit or citizenship increases the likelihood of loan approval.

 

Recommendations for Foreigners

 

Improving Credit History: Open a bank account in Ireland, use credit products, and pay debts on time to build a positive credit history.

Consultation with a financial advisor: Consult a specialist who will help select optimal financing options and prepare documents.

Property Purchase

 

When purchasing property in Ireland, payment is usually made by bank transfer. This ensures the transparency of the transaction and complies with legal requirements. The use of cash for such transactions is not recommended and may raise suspicions among regulatory authorities.

 

Car purchase:

 

When buying a car, payment is also most often made by non-cash means. This can be a bank transfer or payment using a debit/credit card. Some car dealers may accept cash, but the amount of such payments is usually limited and proof of the source of funds is required.

 

There are no legal restrictions in Ireland on the maximum amount of cash payments. However, when making large purchases, such as real estate or a car, the use of cash is not recommended and may raise suspicions among regulatory authorities. This is related to measures to prevent money laundering and terrorism financing.

 

Recommendations:

 

Prepare necessary documents: Bank statements or other financial documents may be required to confirm the source of funds.

Consult professionals: It is recommended to consult a lawyer or financial advisor before making large purchases to ensure compliance with all legal requirements.

Bank Deposits

Bank deposits are a traditional and reliable way to save money. Major banks in Ireland offer various deposit products with fixed and variable interest rates. The interest rates on deposits may vary depending on the term and amount of the deposit.

 

Savings Accounts

Savings accounts provide the opportunity to accumulate funds with the ability to top up and partially withdraw without losing earned interest. Such accounts usually have lower interest rates compared to fixed deposits but offer greater flexibility in fund management.

 

Investments in Stocks

Ireland offers wide access to the stock market, including the opportunity to invest in shares of Irish and international companies. To do this, it is necessary to open a brokerage account with one of the banks or specialized brokerage firms. Investing in stocks involves higher risk but can potentially provide higher returns compared to traditional savings.

 

Investment Funds

Investment funds allow investors to pool their resources for joint investment in diverse assets, such as stocks, bonds, and real estate. Ireland is one of the leading centers for the creation of investment funds in Europe, offering a variety of options for investors with different levels of risk and investment objectives.

 

Pension Savings

The Irish pension system provides the opportunity to make voluntary contributions to private pension funds, allowing you to accumulate funds for a comfortable retirement. Such contributions are often accompanied by tax benefits, making them an attractive tool for long-term savings.

 

Recommendations: Professional advisors can help select optimal solutions that meet your individual needs and circumstances.

The tax obligations of foreign citizens in Ireland depend on their tax status, which is determined based on residency, domicile, and source of income.

 

Tax Status

 

Residency: You are considered a tax resident of Ireland if:

  - You have spent 183 days or more in the country during the tax year;

  - Or have spent 280 days or more in Ireland over two consecutive tax years, with at least 30 days in each year.

 

Domicile: Domicile refers to your permanent place of residence and intention to remain in the country. Foreigners are generally considered non-domiciled in Ireland unless they plan to reside permanently.

 

Taxation Depending on Status

Residents with Irish Domicile: Taxed on worldwide income, including foreign sources of income.

Residents without domicile: Taxed on income from Irish sources and on foreign income remitted to Ireland. This is called the "remittance basis" principle.

Non-residents: Taxed only on income from Irish sources.

 

Main types of taxes

- Income tax: Progressive rates are applied: 20% on income up to a certain threshold and 40% on the excess. These thresholds depend on marital status and other factors.

- Capital gains tax: The rate is 33% and applies to profits from the sale of capital assets.

- Inheritance and gift tax: The rate is 33% with tax-free thresholds depending on the degree of kinship.

- Social contributions: Levied on income and depend on the level of earnings.

 

Tax reliefs and credits

Ireland provides various tax credits and reliefs that can reduce the tax amount. For example, tax credits for workers, those over 65, and others. It is recommended to check the current reliefs on the official website of the Irish Revenue Commissioners.

 

Double taxation avoidance agreements:

Ireland has concluded agreements with many countries to prevent double taxation. This allows avoiding paying taxes on the same income in two countries. Check for such an agreement between Ireland and your country of residence.

 

Recommendations. The Irish tax system can be complex, especially for foreigners. Professional advice from a tax specialist will help optimize tax liabilities and ensure compliance with the law.

In Ireland, the process of filing a tax return for foreign citizens depends on their tax status, which is determined based on residency and the source of income.

 

Determining tax status: Tax Resident or Non-resident.

 

 

Tax return filing obligations:

 

Residents: Obligated to declare worldwide income, including income from abroad.

Non-residents: Declare only income derived from Irish sources.

 

Process of filing a tax return

 

Registration with the tax authorities

   Obtain a Personal Public Service Number, necessary for interacting with government services.

   Register in the online myAccount system on the Irish Revenue Commissioners' website to manage tax affairs.

 

Gathering necessary documents

   - Income statements.

   - Documents confirming other sources of income.

   - Receipts and confirmations of expenses eligible for tax deductions.

 

Completing and filing the return

   - Use the online myAccount system to fill out Form 12 (for PAYE taxpayers) or Form 11 (for self-employed and individuals with additional income).

   - List all income sources and applicable tax deductions.

   - The filing deadline is usually by 31st October of the following year.

 

Specifics for non-residents

Non-residents receiving income from Irish sources (e.g., property rental) must file a tax return and pay the appropriate taxes.

For income from other countries, it is advisable to familiarize yourself with the double taxation avoidance agreements between Ireland and the respective country.

 

Recommendations

 The Irish tax system can be complex, especially for foreigners. Professional advice from a tax specialist will help accurately determine tax liabilities and take advantage of available reliefs.

In Ireland, self-employed individuals and freelancers have certain obligations and can avail themselves of a number of reliefs.

 

Registration and tax obligations

 

Registration as a sole trader: To start activities, you need to register with the Irish Revenue Commissioners. A tax number is assigned after registration.

Bookkeeping: It is mandatory to keep accurate records of all income and expenses related to the activity. Documents must be retained for at least 6 years.

Filing a tax return: An annual income tax return (Form 11) must be filed through the Revenue Online Service.

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Taxes and Contributions

Income Tax: Progressive rates apply: 20% on income up to a certain threshold and 40% on excess income. Thresholds depend on marital status and other factors.

Social Contributions: Self-employed individuals are required to pay Class S contributions at a rate of 4% of net income.

Universal Social Charge: Applicable to gross income with progressive rates ranging from 0.5% to 8%, depending on the income level.

 

Tax Benefits and Deductions

Tax Credits: Self-employed individuals are entitled to standard tax credits.

Business Expense Deductions: Legitimate business expenses, including office rent, professional fees, transportation, and communication expenses, can be deducted from taxable income.

 

Social Benefits

Unemployment Benefit for the Self-Employed: Since November 2019, self-employed individuals paying Class S PRSI contributions are eligible for unemployment benefits under certain conditions.

 

Additional Aspects

 

Business Name Registration: If activities are conducted under a name different from the personal name, business name registration is required with the Companies Registration Office.

Value-Added Tax: Mandatory registration for VAT payments is required if turnover exceeds certain thresholds. Voluntary registration is possible with lower turnover.