Starting an online business can feel like standing at the edge of a very long checklist. Do I need to register a company? Will Revenue come looking for me if I get something wrong? If that sounds familiar, you’re not alone.
Trading online can mean selling a product or service, or running an online booking platform, so not every step here will apply to everyone, whether you’re weighing up online business ideas, starting a small business in Ireland alongside a full-time job, or looking at your options while on social welfare. What matters is understanding your obligations as a business owner from day one.
1) Decide how you want to sell online
Will you set up your own website, use a reseller platform like Amazon or eBay, or a mixture of online and offline sales? This is one of the first decisions to make when exploring online business ideas, and it shapes almost everything that follows.
Consider writing a business plan first. It helps you narrow your target audience and work out what customers expect from your site, and whether you can meet those expectations. Shopify and Squarespace offer easy-to-use templates for new e-commerce businesses, and tools like Calendly help manage client bookings if you offer services rather than products.
Which route makes sense often comes down to how quickly you want to start trading against how much control you want over the customer relationship. The table below sets out the trade-offs.
|
Your own website |
Marketplace (Amazon, eBay, Etsy) |
Mixed approach |
|
|
Set-up cost |
Higher upfront, no referral fees |
Lower, but a cut of every sale |
Staged as you grow |
|
Customer data |
You own the mailing list |
Marketplace owns the relationship |
Partial view across both |
|
Reach |
Depends on your own SEO |
Instant access to an audience |
Combines both approaches |
|
Best suited to |
Full brand control |
Testing demand quickly |
Hedging your bets |
If you plan to operate remotely, consider setting up a virtual business address in Ireland, which can enhance your business’s professional image and streamline correspondence.
2) Sole trader or limited company
Starting an online business means officially registering with Revenue and the Companies Registration Office (CRO), however small the business starts out. You’ll also need to decide what structure suits you: sole trader or limited company, worth getting right from the outset since it affects your personal risk and tax position, whether you’re in full-time employment or looking at how to start an online business while on social welfare.
If you’re just testing the water, sorting this out can feel like unnecessary admin for a business that doesn’t exist yet. That’s a fair concern, but it’s easier to get right at the start than to unpick later, and it’s usually a quick, low-cost conversation.
As Citizens Information explains, sole traders are personally liable for the business’s debts, so you may need to sell personal assets to repay them. A limited company limits that liability, since registration creates a separate legal entity. The table below sets out the main differences.
|
Sole trader |
Limited company |
|
|
Personal liability |
Unlimited; personal assets can be at risk |
Limited to your shareholding |
|
Registration |
Register with Revenue as self-employed |
Register with the CRO and Revenue |
|
Tax |
Income Tax on all business profits |
Corporation Tax on company profits |
|
Setup cost |
Lower |
Higher, plus ongoing filing requirements |
|
Other requirements |
None |
May need a company seal for legal documents |
|
Best suited to |
Testing an idea, lower-risk trading |
Growth plans, higher risk, external funding |
Starting up alongside a job or on social welfare
Plenty of people start an online business while still working full-time, testing an idea in the evenings first. Any profit is taxable in its own right, so you’ll need to register as self-employed and file a return covering it, even though you’re already taxed under PAYE.
If you’re on a social welfare payment, the Back to Work Enterprise Allowance scheme can let you keep a percentage of it for up to two years while you get the business off the ground, provided your plan is approved in advance. Worth exploring before you assume starting up means losing your income altogether.
3) Build your brand, website and social media presence
Starting an online business means you need an online presence to stand out from your competitors.
Many agencies and consultancies can help you build your brand if you don’t have the experience in-house. Website design, search engine optimisation, branding, digital marketing and user experience are all worth bringing in expertise for.
If you plan to trade under a name other than your own or your registered company name, you also need to register that business name with the CRO within one month of first using it, as the Department of Enterprise, Tourism and Employment sets out. It’s worth searching the register first, so you’re not spending on branding around a name someone else already holds.
Think practically about where your customers spend time, too. A B2B service business might get more traction on LinkedIn, while a consumer product often builds a following on Instagram or TikTok first. Keep your name, logo and tone consistent across your website, socials and marketplace listings.
4) Focus on your analytics
Starting an online business means you can use software like Google Analytics to track how your website is performing.
Visitors, conversions and average order value per customer are all useful statistics that help you understand your business. Online e-commerce platforms like Shopify have ready-made reports built in, and Google Analytics offers free courses if you want to learn how to analyse your business in more depth.
5) Set up your taxes properly
As a business owner, you need to make sure your business is tax registered, and this needs to be done before your business starts to invoice clients.
Sole traders register for Income Tax, and limited companies register for Corporation Tax. Other taxes to consider registering for include Value Added Tax (VAT) and Pay As You Earn (PAYE) if you take on staff.
If your business is approaching the VAT thresholds, understand how to charge it correctly, as the rules differ by what you’re selling and to whom. Always seek professional advice before you register.
To put that in context: if you’re selling online services and turnover crosses €42,500 in any rolling 12-month period, not just a calendar year, you’re obliged to register for VAT. Selling physical goods gives more headroom, with the threshold at €85,000, as Revenue’s VAT thresholds guidance confirms. Many online businesses sell a mix of both, so check which threshold applies rather than assuming the higher figure covers everything.
6) Know what expenses you can claim
Claiming tax-deductible business expenses reduces the tax you pay at the end of the year. Expenses must be wholly and exclusively for the purpose of the business, so it’s worth knowing which ones qualify, as Citizens Information sets out. For example, you can claim a range of expenses if you’re working from a home office.
Keep track of your expenses and finances so you don’t overpay on your tax bill. Online accounting software greatly reduces the admin involved in recording and maintaining your records.
While starting an online business is exciting, it’s also worth knowing how to close a limited company in Ireland, so you’re prepared for all phases of the business lifecycle, should your plans change.
FAQs
Do I need to register a business to sell online in Ireland? Yes. Whether you set up as a sole trader or a limited company, you must register with Revenue, and limited companies must also register with the CRO, before you start invoicing clients.
Is it cheaper to start as a sole trader or a limited company? Registering as a sole trader is generally cheaper and simpler than setting up a limited company. A limited company costs more to set up but offers limited liability protection that a sole trader doesn’t have.
Can I start an online business while working full-time or on social welfare? Many people start an online business alongside a full-time job or while receiving social welfare. It’s important to understand your tax and reporting obligations from the outset, so it’s worth getting professional advice early.
What taxes will my online business need to register for? Depending on your structure and activity, you may need to register for Income Tax or Corporation Tax, plus VAT and PAYE if they apply to your business.
What is the Back to Work Enterprise Allowance? A scheme letting people moving from certain social welfare payments into self-employment keep a percentage of that payment for up to two years, subject to advance approval.
Do I need to register a business name for my online business? Yes, if you trade under a name other than your own or your company’s registered name, and within one month of first using it.
Ready to start your online business?
You don’t have to work any of this out alone. Kinore is a large, senior-led firm with a dedicated client success team, so there’s always someone who knows your business, whatever the question.
Get in touch with our Client Services Team, and we’ll talk you through what you need to register for, and get you set up correctly with our Company Formation Service, so you have more time to focus on your website, suppliers and analytics. Call us on 01 905 9364, email hello@kinore.com, or book a discovery call to get started.
The information provided in this article is for general guidance and informational purposes only. It does not constitute professional accounting, tax, or financial advice, and should not be relied upon as a substitute for advice tailored to your specific circumstances. While we take care to ensure the content is accurate and up to date at the time of publication, legislation, tax rates, thresholds, and compliance requirements in Ireland can change.
