Unlike some jurisdictions, Ireland doesn’t have a requirement to have a director resident within the state but does retain the need for a director resident in the European Economic Area (“EEA”, includes the European Union, Iceland, Norway and Liechtenstein). This means that an Irish company must have an EEA resident director in place as part of the incorporation process. Worth noting that residence for more than six months of the year is required and EEA passport holders will not count if not currently resident in the region.
Non-Resident Director Bond
Section 137 of the Companies Act 2014 stipulates that where an Irish company does not have an EEA resident, there is a requirement to take out a Non-Resident Director Bond. The Bond acts like an insurance policy for the Irish State to reclaim funds owed by a company should it exit the jurisdiction leaving unpaid taxes, penalties or other expenses that may be incurred by government departments. The Bond itself costs just under €2,000 and covers a company for two years to a total amount of €25,000.
Alternatives
Many companies do look at other alternatives like appointing a local employee to a company or engaging a professional director. It must be noted that any director appointed would have the same rights and responsibilities as any other director and the decision would need to make strategic sense rather than simply satisfying a requirement. Should a company continue to trade with non-resident directors, it may have the option to establish a real and continuous link in the state in lieu of a bond. This link displays that a company has established sufficient trade, physical presence and employees in the state that a bond is no longer required.
What this means for your company:
- Must have one EEA resident director in place
- Where no EEA resident director is in place avail of Non-Resident Director Bond
- Just under €2,000 to cover two years, paid in advance of incorporation
- Renewed at the end of the two-year period for a further two years
- Option to display real and continuous link in the state with Irish Revenue and gain an exemption for renewal
- Many companies appoint local employees or engage a professional director to fulfil the requirement
We can of course assist with any of the above options and should you have any queries don’t hesitate to let us know.
