Non-EEA Resident Director Bond: A Guide for Irish Companies 

Setting up an Irish company while all directors live outside the European Economic Area (EEA) is possible, but there are specific company law requirements to consider. One of the main requirements is the Non-EEA resident director bond, commonly known as a Section 137 bond.

Under Section 137 of the Companies Act 2014, an Irish company generally needs at least one director who is resident in an EEA member state. The EEA includes EU countries as well as Iceland, Liechtenstein and Norway.

What Is a Non-EEA Resident Director Bond?

A Section 137 bond is a prescribed surety bond that can be used when an Irish company does not have an EEA-resident director.

The bond has a value of €25,000 and must normally remain in place for a minimum of two years. It is not a €25,000 cash payment to the Companies Registration Office (CRO). Instead, it is provided through an approved surety such as a bank, building society, insurance company or credit institution.

The bond provides financial security for certain fines and penalties covered by the legislation.

Who Needs a Section 137 Bond?

The bond may be relevant when:

• None of the company's directors lives in an EEA country.

• A new Irish company is being incorporated with only non-EEA-resident directors.

• The company's only EEA-resident director is leaving the company.

• A director lives in the UK and there is no other EEA-resident director.

It is important to understand that residency is different from nationality. A person's passport does not determine whether they meet the EEA-residency requirement. Their actual residence is relevant. The CRO also confirms that the UK is no longer part of the EEA for this purpose.

When Does the Bond Need to Be in Place?

For a new company with no EEA-resident director, the bond needs to be effective from the date of incorporation. The CRO states that the bond should accompany the incorporation application where none of the proposed directors is EEA-resident.

This means international founders should consider the bond before submitting their Irish company formation application, rather than treating it as something to arrange later.

What Does the Bond Cover?

The Section 137 bond is designed to cover certain specified company law fines, tax-related offences and defined Revenue penalties.

It does not act as insurance for normal business liabilities. For example, it does not cover ordinary supplier debts, loans, employee wages or general trading expenses.

What Happens After Two Years?

The minimum bond period is two years. Before the bond expires, the company should consider which compliance route applies to its circumstances.

Possible routes can include:

• Renewing or replacing the Section 137 bond.

• Appointing a genuine EEA-resident director.

• Applying for a Section 140 certificate if the company has established the required real and continuous link with economic activity in Ireland.

A Section 140 certificate is a separate route and is based on the company's actual economic connection with Ireland. It is not simply an alternative document that every newly formed company can use instead of a bond.

Why Proper Compliance Matters

The EEA-resident director requirement is part of Irish company law. If a company no longer has an EEA-resident director, a valid Section 137 bond or another applicable exemption needs to be maintained.

Companies should also keep their CRO records up to date when directors or their relevant details change. The CRO requires director changes to be notified using the appropriate filing procedures.

For founders based outside Europe, getting the structure right at the beginning can make the company formation process much easier to manage.

Get Help With a Non-EEA Resident Director Bond

International founders can establish an Irish company without personally having an EEA-resident director, provided the statutory requirements are properly addressed. The Non-EEA resident director bond is one route available under Irish company law.

Forti provides support with the Section 137 bond and Irish company formation process for non-resident founders. You can review the service and requirements on the Forti Non-EEA Resident Director page.

Frequently Asked Questions

1. What is a Non-EEA resident director bond?

It is a prescribed Section 137 surety bond that allows an Irish company without an EEA-resident director to meet the relevant statutory requirement. The bond has a prescribed value of €25,000 and must have a minimum two-year validity period.

2. Do all Irish companies need a Section 137 bond?

No. A company with at least one qualifying EEA-resident director generally does not need the bond for this requirement. Other statutory routes, such as a Section 140 certificate, may also apply in specific circumstances.

3. Can a UK-resident director satisfy the EEA requirement?

No. The UK is no longer part of the EEA. A UK-resident director does not satisfy the EEA-residency requirement unless the company has another qualifying EEA-resident director.

4. Is the €25,000 bond paid to the CRO?

No. The €25,000 is the value of the prescribed surety bond. It is not a €25,000 cash deposit paid to the CRO. The bond is arranged through an eligible surety provider.

5. How long does a Section 137 bond last?

The bond must have a minimum validity period of two years. Companies should plan their next compliance route before the bond expires.

6. Can a non-EEA resident own an Irish company?

Yes. Being resident outside the EEA does not by itself prevent someone from owning an Irish company. However, the company must meet the applicable requirements concerning directors and EEA residency.

7. Can I set up an Irish company if all my directors live outside Europe?

Yes, subject to meeting the relevant Irish company law requirements. Where there is no EEA-resident director, a Section 137 bond is one route available to satisfy the requirement.