This article looks at some of the practical considerations for Irish companies to ensure it remains compliant with the Act post-Brexit.

EEA-resident director requirement

Section 137 of the Act states that if an Irish company does not have at least one company director who is resident in the EEA, a bond must be taken out. It is important to note that this requirement pertains to residency and not citizenship. A company director who holds an Irish or other EEA passport but resides outside of the EEA would also require a bond. This includes an Irish passport holder living in Northern Ireland.

Revenue Bonds

Securing a Section 137 Non-Resident Director Bond or ‘Revenue Bond’ exempts companies registered in the Republic of Ireland from the requirement to have a director who is resident in the EEA.

A Revenue Bond operates as an insurance policy which insures the company for a sum of €25,000 and its purpose is to cover all of the following:

  • Any fine imposed on the company in respect of offences under the Act (e.g. failure to file Annual Returns and Audited Accounts on time).​
  • A fine for failure to supply certain information to the Revenue Commissioners (mainly information required on the Form CRO 11F).
  • Any penalty which the company has been held liable to pay under Section 1071 or Section 1073 of the Taxes Consolidation Act 1997.
  • Any expenses incurred in recovering the fines and penalties mentioned above.

The bond also acts like an insurance policy for the government to cover any unpaid taxes or fines if the company leaves the jurisdiction.

The Non-Resident Bond covers a period of two years and must be put in place at the incorporation stage or upon the removal of the EEA-resident director of the company. This also applies to directors who live in a jurisdiction that is no longer in the EEA, such as the UK.

Having the bond in effect does not replace or act as a company director; it merely allows the company to operate without an EEA-resident director in place. Following the two-year period of the bond, the company is required to take action by:

  • renewing the bond for a further two years;
  • putting an EEA-resident director in place; or
  • creating a ‘real and continuous’ link in the State.
The ‘real and continuous’ link exemption can be applied for with the Revenue Commissioners when a company displays significant employment and a strong physical presence in Ireland. This will then relieve the company of the requirement of a bond or an EEA-resident director.
The directors of a company operating in breach of Section 137 will be liable to a Category 4 offence under the Act and each director would be liable to a fine of up to €5,000 each.
Becoming an Irish tax resident


If the company wishes to be Irish tax resident, it separately needs to be able to demonstrate that it is “managed and controlled” in the Republic of Ireland. With a corporation tax rate in the State currently at 12.5 per cent, this might be particularly attractive for UK tax resident companies bearing in mind Rishi Sunak’s 2021 Budget announcement that corporation tax in the UK is to rise to 25 per cent by 2023.
For further information, contact John McMahon.