Preparing an Irish Company for Brexit during the current transition period is critical to ensure compliance and continuity of business. Currently the United Kingdom is following EU rules in a transition period which is due to end on 31st December. During the transition period, the relationship between the United Kingdom and the EU will remain the same.
Negotiations continue as per the date of writing this article, but there is no agreement in place as of yet. If the EU and the United Kingdom do not come to agreement before the 31st December then the United Kingdom will no longer be members of the European Economic Area (EEA) and section 137 of the Companies Act 2014 will require all companies with Directors living in the United Kingdom, without a Director in the EEA to put a Section 137 Bond in place. We wrote an article on this bond back in 2015. The bond must have a duration of two years, and must have a value of €25,000. The bond is provides that in the event of a fine imposed on the company under Taxes Consolidations Act 1997 or the Companies Act 2014 that part or all of the fine will be paid through the Bond.
Preparing an Irish Company for Brexit not only involves considering the options regarding the Non Resident Directors bond, but there are other considerations for Irish and UK based Directors. The Irish Government and Enterprise Ireland have an excellent website on this subject including a currency impact calculator and a Brexit score card. The score card is a first step for businesses to establish which actions they need to take.
If you are unsure if you require a Section 137 bond then Contact us so we can determine if its required for your business whether you are incorporated or planning to incorporate a company.