Non-Resident Director Bond

Non-Resident Director Bond

As discussed earlier (Link to https://www.irishformations.ie/benefits-forming-company-ireland/ ) Ireland is a favorable place for a company formation.

Section 137 (Section 43 of the old Act) of the Companies Act requires every Irish Company to have at least one Irish-resident director. With the Amendment of the Companies Act in 2009 this regulation was softened insofar as every Irish registered company is now required to have at least one director who is a resident of the European Economic Area (EEA). The EEA consists of all current member states of the European Union plus Liechtenstein, Iceland and Norway. The countries are:  Liechtenstein, Iceland, Norway: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom . insurance-sales

Setting up a company in Ireland without having an EEA-based director requires a Section 137 Non-Resident Director Bond in force to the value of €25,394.76 respectively. In case of a failure of the company the Bond will be monetized to pay fines and related costs imposed to the company due to offences under the Companies Act 2014 or the Taxes Consolidation Act 1997, e.g. the failure to file annual returns and audited accounts on time or the failure to supply required forms to the Revenue Commissioner.

Authorized classes of persons to enter into a Bond are banks, building societies, insurance companies and credit institutions. The effective date of the Bond may not exceed 4 working days prior to the date of the company’s incorporation. The validity period of the Bond has to be at least 2 years. As it is required as long as a company doesn’t have a director who is resident in an EEA member state, the Bond may have to be renewed after this period. If a company fails to renew a still required Bond or to organize a Bond in case of the only EEA resident director ceasing, it can be struck off by the Registrar of Companies and the directors might face a law suit.

After incorporation, a company can be exempt from the requirement to have a Bond, if the company has a real and continuous link with one or more economic activities that are carried on in Ireland.

Irish Formations can organize a Section 43 Bond for your company formation if required. Contact us for further information.