Section 137 of The Companies Act 2014 states that at least one company director is resident in the European Economic Area (EEA). The EEA is made up of the European Union and Iceland, Norway & Liechtenstein.
If an Irish Company does not have at least one company director who is resident in the EEA, a Bond must be taken out. This requirement relates to residency and not citizenship The Bond exempts companies registered in the Republic of Ireland from the requirement to have a Director who is resident in the EEA.
The Bond insures the company for a sum of €25,000 and its purpose is to cover the following:
Any fine imposed on the Company in respect of offences under the Companies Act 2014
A fine imposed on the company in respect of an offence under section 1078 of the Taxes Consolidation Act 1997 committed by it, being an offence that consists of a failure by the company to deliver a statement which it is required to deliver under section 882 of that Act or to comply with a notice served on it under section 884 of that Act.
A penalty which the company has been held liable to pay under section 1071 or 1073 of the Taxes Consolidation Act 1997 .
Any expenses incurred in recovering the fines and penalties mentioned above
The Bond covers a period of 2 years and must be put in place on incorporation or upon the removal of the EEA resident director of the company. The Bond is effectively an insurance policy to cover the government for unpaid taxes or fines if the company leaves the jurisdiction.
Following the 2 year period of the bond, the company is required to take action to either renew the bond for a further 2 years, put an EEA resident director in place, or create a real and continuous link in the state.