Corporate investments: Can you invest money from your company?

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It’s important to save for the future if you want your company’s goals to happen. 

If you have extra money in your company account, some choices can help you get the long-term returns needed for your company’s future development. 

It’s essential to explore these opportunities to ensure your company’s sustained growth and prosperity in the years to come.

What is corporate investing?

Corporate investing refers to the practice of companies strategically allocating surplus capital into various investment opportunities. 

The primary goal is to generate long-term returns that can be used for future development and growth of the company. 

Is it wise to keep excess cash in a deposit account?

While keeping your company’s funds in deposits can serve short-term cash flow needs, relying entirely on depositing surplus cash may be inefficient and negatively impact your balance sheet, for the following reasons:

  • Low deposit interest rates and high inflation pose challenges.
  • Deposits offer minimal defense against inflation, diminishing the future purchasing power of your company’s savings.

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Reasons to invest your company’s money

Beating Inflation and interest rates

With low bank interest rates and rising costs due to inflation, leaving your cash untouched can make it worth less over time. 

Investing your company’s money offers the potential to achieve higher returns than traditional deposit interest rates. 

For this reason, exploring alternative investment opportunities can yield more attractive financial outcomes for your company.

Investing also helps combat the eroding effects of inflation on savings. By earning returns that outpace inflation rates, your company can maintain and potentially increase its purchasing power over time.

Wealth growth

Wealth growth is the main purpose of investing. 

Investing your company’s money provides an opportunity for wealth growth over time, and effective wealth management is crucial in this process. 

One of the main factors of investing is to determine for how long you can afford to tie up your company’s capital into a investment fund. After this you can choose what type of investment and risk tolerance.

For example, if your aim is distant in the future, you might be able to invest in the stock market, as the graph below illustrates how short-term fluctuates in stock markets are effectively smoothed out over time.

Long-term investing can smooth out market fluctuations

For well-informed decisions, it is recommended to consult with one of our financial advisors at True Wealth. We can guide you to determine the best investment options for your company.

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Corporate Tax Advantage

One of the most tax-efficient methods to invest in Ireland is through a company. 

Businesses are subject to exit taxes at a rate of 25%, which is also the amount you will pay on any interest income you may earn in the future.

That is less than the 41% that individuals pay when purchasing the majority of mutual funds.

Mitigate risks through diversified investing

Investing allows you to diversify your company’s financial portfolio. 

Spreading investments across different assets or sectors helps mitigate risks, as the performance of one investment may not directly impact the entire portfolio.

There are many funds available, from well-balanced multi-asset funds that provide exposure to equities, real estate, and commodities to cash-and-bond style funds that offer a high level of protection for your company’s capital. 

There are even high-risk, high-reward funds that have a track record of strong growth.

If you’re not sure where to invest in we can assist you in discovering the best investment strategy that aligns with both your risk tolerance and financial objectives.

Invest with flexibility

You can invest the funds of your business in a variety of ways, such as making lump sum payments or regular payments every month.

To meet your cash flow needs, you can also start, pause, raise, and lower your savings contributions.

Take advantage of the freedom to switch up your investment fund whenever you choose without having to pay fees.

Sustainable investments

Engage in responsible investing to align with ethical principles, allowing your company’s funds to make a positive impact in the world while also offering the potential for rewarding outcomes.

Learn more about sustainable investment by reading our article, Sustainable Investment Funds: Aviva Multi-Asset ESG Fund.

Start investing your company’s money with True Wealth

Whether your priority is capital preservation through low-risk options or pursuing growth with higher-risk opportunities, we at True Wealth aim to identify investment funds that match your objectives. 

At True Wealth, our team of financial advisors specialises in savings and investments tailored specifically for business owners, as well as strategic wealth management

We are also experts in, retirement and pension planning, pension tracing, personal and business financial planning, personal and business protection and mortgages.

Consult with our experts at True Wealth to proactively plan for the challenges and opportunities that lie ahead for your business.

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All our content has been written or overseen by a qualified financial advisor. However, you should always seek individual financial advice for your unique circumstances.

Aviva Life & Pensions Ireland Dac, trading as Aviva Life & Pensions Ireland and Friends First, is regulated by the Central Bank of Ireland.

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