There has been a 21pc drop in the number of business start-ups in 2008, compared with the previous year.
“Not surprisingly, the sectors that saw the biggest drop were property and construction, which experienced a decrease of 40pc and 38pc respectively,” explained head of professional services at ICC Formations, Jon Rock.
“This was closely followed by the leasing and rental sector, which saw a decrease of 35pc in the number of new companies formed in 2008,” said Rock.
However, despite this, it was not bad news for all sectors. “The number of energy companies formed increased by 30pc to 121, while several sectors — including agriculture, manufacturing and wholesale — remained relatively static.”
Despite the deterioration in domestic economic circumstances, Rock maintains that at present there are huge opportunities for new start-ups and that now could be the perfect time for entrepreneurs to set up their own business.
The Finance Bill introduced by the Government in October contains measures specifically designed to encourage new business.
“New companies can now avail of an exemption from corporation tax if their corporate tax liability does not exceed €40,000 in one year. This means that a new business can earn profits of €960,000 tax-free in their first three years,” Rock explained.
“In addition, because they are not paying corporation tax, they will save money on the cost of professional advice pertaining to their tax liability.”
Companies investing in R&D will further benefit as the tax credit has been increased from 20pc to 25pc.
With unemployment rising, Rock says people may now find themselves with both the time and motivation to avail of these new incentives and take the plunge into becoming their own boss.
By John Kennedy