Newry accountant forces a change in european law

A chance meeting between Newry accountant John MacMahon and European Commissioner for the Internal Market and Services, Charlie McCreevy, has led to a change in Irish companies law that will potentially save Northern businessmen, setting up companies in the South, thousands of pounds. 

In 2007, John MacMahon, who heads one of Ireland’s largest cross-border practices, brought to Mr McCreevy’s attention what he believed was a significant and costly anomaly in Irish company law. 

Section 43 of the Irish Companies Act 1999 required that businessmen from outside the Irish Republic must either appoint an Irish director resident in the 26 counties or hold a substantial bond to the value of 25,000 Euros (necessitating a payment of 1,800 Euros every two years) when setting up a company there, a clear breach, John MacMahon believed, of European competition laws.

Mr MacMahon believed the law was particular harsh on Northern businessmen and in direct contradiction to the spirit of cross-border co-operation engendered by the Good Friday Agreement. 

He issued a formal complaint in August 2007 to the European Commission on the grounds the law was incompatible with the freedom of establishment guaranteed by Article 43 of the EC Treaty.

In August, the European Commission announced that the Irish Government had amended the law to come into line with European Community law with the result that neither the bond nor the appointment of an Irish director will be necessary any longer when businessmen from outside the South set up private companies there.

Commenting on the change in law, John MacMahon said, “I am delighted with this victory both in terms of improving operating conditions for Northern businessmen who have companies in the Republic and in the wider sense of enhancing cross-border business activity. 

“I am very grateful to Charlie McCreevy for all his efforts and those of his staff in helping to bring this about and for the timely response of the Irish government. I do believe, however, that there still remains much to do in this area. Both the Northern Irish Assembly and Dáil Éireann need to look much more closely at other serious anomalies which at a time when we should be trying to generate as much economic activity on this island as possible, continue to restrict business co-operation between North and South. In particular I am also campaigning for a change in the pension contribution tax breaks which penalise Northern businessmen working in the South.”

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