This article is for non-Irish business owners and entrepreneurs who want to set up a company in Ireland but don't live in the EEA.If you're wondering how to legally incorporate without having a European resident on your board, this guide covers the Section 137 bond requirement, what it costs, and your alternative compliance options like appointing an EEA-resident director or obtaining a Section 140 certificate.
Key Takeaways
• Every Irish company must have at least one EEA-resident director or obtain a €25,000 Section 137 bond.
• The Section 137 bond costs approximately €1,600 plus VAT for two years and must be in place before incorporation.
• EEA residency requires physical presence in an EEA state for 183 days or more in the preceding 12 months.
• Non-compliance is a criminal offence with fines up to €5,000 and prevents filing annual returns with the CRO.
• New companies cannot use Section 140 certificates; only established companies with proven Irish economic activity qualify.
Can non-residents be directors of Irish companies?
Yes, non-residents can be directors of Irish companies. However, every Irish company must have at least one director who is resident in the European Economic Area (EEA), which includes all 27 EU member states plus Iceland, Liechtenstein, and Norway.
What if I don't have an EEA-resident director available?
You can obtain a Section 137 bond instead of appointing an EEA-resident director. This is a €25,000 surety bond that costs approximately €1,600 plus VAT for a two-year period and exempts your company from the EEA director requirement.
How do I prove EEA residency for a director?
Under Section 141, a person qualifies as resident in Ireland if they're present in the State for 183 days or more in the 12 months preceding the relevant time. Similar residency tests apply for other EEA countries, and directors should maintain evidence of their residency status in case the Companies Registration Office questions compliance.
When must the Section 137 bond be in place for a new company?
The bond must be effective from the date of incorporation, and you must provide the bond number to the Companies Registration Office before they'll complete your incorporation. You cannot incorporate first and add the bond later—the CRO will not process the incorporation without confirmation of bond coverage.
What happens if my company doesn't comply with Section 137?
Not having an EEA-resident director, Section 137 bond, or Section 140 certificate is a criminal offence under Irish law with fines up to €5,000. Additionally, the CRO will prohibit you from filing annual returns, creating a compliance deadlock where you cannot meet basic filing obligations.
What does the Section 137 bond actually cover?
The bond covers specific financial liabilities including fines imposed under the Companies Act 2014, fines for failure to supply information to Revenue, penalties under the Taxes Consolidation Act 1997, and expenses incurred recovering these amounts. However, it doesn't eliminate directors' legal obligations—directors remain fully responsible for company compliance regardless of bond status.
Can I use a Section 140 certificate instead of a bond for a new company?
No, new companies cannot obtain Section 140 certificates at incorporation because the certificate is based on previous tax years. This option only works for established companies that can demonstrate a real and continuous link with economic activities being carried on in Ireland.
How long does it take to get a Section 137 bond?
Processing typically takes 7-10 working days from application submission. You'll need to submit the application through an insurance broker, who will review it and issue a bond certificate upon approval, which you then file with the CRO.
What happens when my Section 137 bond expires after two years?
You have three options: renew the bond for another two years at the same cost, appoint an EEA-resident director to eliminate the need for a bond, or obtain a Section 140 certificate if your company is now eligible. Once issued, bonds are non-refundable, so plan accordingly.
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