This article is for foreign entrepreneurs and business owners setting up an Irish company without any directors living in the EEA.
If you're wondering why you need a Section 137 bond, how much it costs, or whether appointing an EEA-resident director might be simpler, this guide covers the bond requirements, costs, application process, and your alternatives.
Key Takeaways
• Irish companies without EEA-resident directors must post a €25,394 bond, costing approximately €1,600 every two years. • The bond must be renewed before expiry; letting it lapse creates serious non-compliance and potential enforcement action. • Appointing an EEA-resident director eliminates the bond requirement and is often more cost-effective long-term than biennial renewals. • UK residents no longer qualify as EEA residents post-Brexit; Switzerland is also excluded from the EEA definition. • The Corporate Enforcement Authority can claim against your bond for failures like missing annual returns or statutory breaches.
Laura Ryan is a practising Barrister at the Bar of Ireland. She graduated from the Honourable Society of King’s Inns in 2024, having previously qualified and practised as a Chartered Accountant in a big four accounting firm.
Do I need a Section 137 bond if none of my directors live in the EEA?
Yes, if your Irish company has no directors residing in the European Economic Area, you must obtain a Section 137 bond. This bond serves as financial security ensuring your company complies with Irish company law, and it's required from the moment of incorporation if no EEA-resident director exists.
How much does a Section 137 bond cost?
The bond itself costs approximately €1,600 for a two-year term, which is the premium you pay to the bond provider. This is separate from the bond amount of €25,394, which is the security guarantee. You'll need to pay this €1,600 fee every two years to maintain the bond, plus any additional legal fees for arranging it.
Can I just appoint an EEA-resident director instead of getting a bond?
Yes, appointing an EEA-resident director eliminates the bond requirement entirely and is often simpler and cheaper for long-term operations. Over a five-year period, a director appointment is typically more cost-effective than paying biennial bond premiums, and you avoid the hassle of regular renewals.
Do UK residents count as EEA residents for this requirement?
No, UK residents no longer count as EEA residents following Brexit. The EEA includes all 27 EU member states plus Iceland, Liechtenstein, and Norway, but excludes both the UK and Switzerland.
How long does it take to get a Section 137 bond approved?
The process typically takes 2-3 weeks from application to Companies Registration Office approval. The bond cannot be backdated, so you should apply early in the incorporation process to ensure continuous compliance from day one.
What happens if I let my Section 137 bond expire?
Letting the bond lapse while lacking an EEA-resident director creates serious non-compliance issues and can trigger enforcement action by the Corporate Enforcement Authority. You must renew before expiry to maintain compliance, ideally contacting your bond provider six months before the expiration date.
Can the Corporate Enforcement Authority actually claim money from my bond?
Yes, the Corporate Enforcement Authority can claim against the bond if your company breaches statutory obligations, such as failing to file annual returns, director misconduct, or other company law violations. The bond provider pays valid claims and then seeks recovery from the company and directors.
What happens to my bond if I later appoint an EEA-resident director?
The bond requirement ends immediately when you appoint an EEA-resident director, and you can request a refund for the unused portion of your bond premium. You'll need to file Form B10 with the Companies Registration Office, notify your bond provider of the status change, and request a pro-rata refund for the unused period.
