This article is for non-EEA founders and directors setting up or running an Irish company.
If you're wondering whether you can be a director without living in Europe, or what this "Section 137 bond" requirement actually means, this guide explains the EEA residency rule, how the bond works as an alternative, and what happens if you're non-compliant.
Key Takeaways
• Irish companies must have at least one EEA-resident director or obtain a Section 137 bond to comply with law. • A Section 137 bond costs €1,600 for two years and must be renewed to maintain compliance. • Without an EEA director or bond, your company faces fines up to €5,000 and cannot maintain good standing. • EEA residency requires physically living in the EEA for 183+ days per year, not just citizenship. • Most non-EEA founders choose Section 137 bonds over nominee directors for simplicity and to avoid third-party liability.
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 EEA, or you must obtain a Section 137 bond to satisfy this legal requirement.
What counts as being EEA resident for director purposes?
You're considered EEA resident if you spend more than 183 days per year in an EEA country (EU countries plus Iceland, Liechtenstein, and Norway). Physical residence matters, not just passport or citizenship - so Irish citizens living abroad or UK citizens after Brexit don't automatically qualify.
What is a Section 137 bond and how much does it cost?
A Section 137 bond is an insurance policy that exempts your company from the EEA director requirement by providing €25,000 coverage for certain company obligations. It costs approximately €1,600 for a two-year term and must be renewed every two years to maintain compliance.
Can I appoint a nominee director instead of getting a bond?
Yes, you can appoint an EEA-resident nominee director to satisfy the residency requirement. However, they have full legal duties and potential liability as a real director, even if they have limited involvement in day-to-day operations, so they must understand their responsibilities.
What happens if I don't have an EEA director or a Section 137 bond?
Your company becomes non-compliant with Irish law and faces fines of up to €5,000, while directors can be fined up to €5,000 individually. The CRO may refuse to register documents, and investors and banks will not work with non-compliant companies.
Do all my directors need to be EEA resident?
No, only one director needs to be EEA resident, or you need a Section 137 bond. All other directors can be from anywhere in the world - you could have five directors with four in the US and one in Ireland, or five non-EEA directors with a bond.
Can I switch between having a bond and having an EEA-resident director?
Yes, you can switch at any time between the two options. If you hire an EEA-resident director, you can let your bond lapse, but if your EEA director leaves, you must get a bond before they resign to avoid any period of non-compliance.
Does having an Irish-resident director make my company Irish tax resident?
No, director residency is separate from tax residency. Tax residency depends on where the company is managed and controlled, though having an Irish director can be one factor in determining tax residency, so get tax advice if you have concerns.
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