Non EEA Resident Director Bond
What is meant by a Non-EEA Resident Director Bond?All companies registered in Ireland are required to have atleast one director who is resident in one of the European Economic Area (EEA) member states. Where all the directors of the company are resident outside of EEA member states, the company is required to have a non-resident insurance bond in place, under the requirements of the Companies Act, 2014. The bond is made to the value of €25,000 in the prescribed form. Certain points to note in relation to the bond are as under:
- The purpose of the bond is to ensure that the company fulfils its statutory responsibilities, like filing of required returns with the CRO and the Revenue. It secures the company in the event of any fines imposed on the company for non-compliance of Companies Act or Taxes Consolidation Act;
- It is important to note that the residence is of essence rather than the citizenship. This means that where a director is a national of an EEA member country but is not resident in any of those countries, the company will need to have a non-EEA resident director bond;
- Also, holding a bond does not exempt a company from having a director, it only allows a company to carry out its operations without having a resident director;
- The effective period of the bond is prescribed as a period of two years, after which is should be renewed.
Who Should Secure a Bond for Non-EEA Resident Directors?
Any Irish company that does not have an EEA-resident director should secure such bond. If the company does not have an EEA-director at the time of its incorporation, the application for incorporation of the company should be accompanied by a bond.
Similarly, where a single director resident in an EEA member country resigns from his position, the company should either appoint another director resident in any EEA member country or should secure a bond.
Exemption from having a Non-Resident Insurance Bond
Where a company has an established history of operations in Ireland and is able to demonstrate that it has a real and continuous link with one or more economic activities that are being carried out in the State, it can apply for a certificate under section 140. Obtaining this certificate will exempt the company from the requirement of having atleast one EEA-resident director.
How Can Fusion Formations Help You?
It is important to note that the breach of the requirement of having an EEA-resident director brings serious consequences. Where an Irish registered company fails to have atleast one EEA-resident director, it commits a criminal offence and the company and every officer may be prosecuted. Therefore, it is of significance that this requirement is taken care of professionally, and this is where our professional team can help you.
If you have any queries regarding the requirement of non-EEA resident directors, please feel free to contact out team and they will be happy to answer your concerns.