NON RESIDENT DIRECTOR BOND (2 YEARS)
EXEMPTION FROM THE REQUIREMENT TO HAVE AN EEA-RESIDENT DIRECTOR
The requirement to have at least one resident director from a member State does not apply to any company which for the time being holds a bond, in the prescribed form, in force to the value of €25,394.76 and which provides that in the event of a failure by the company to pay the whole or part of:
– a fine imposed on the company in respect of an offence under the Companies Acts, 2014, committed by it, being an offence which is prosecutable by the Registrar of Companies and
– a fine imposed on the company in respect of an offence under section 1078 of the Taxes Consolidation Act 1997 and
– a penalty which it has been held liable to pay under section 1071 or 1073 of the Taxes Consolidation Act 1997,
there shall become payable under the bond a sum of money for the purpose of same being applied in discharge of the whole or part of the company’s liability in respect of any such fine or penalty.
The bond must have a minimum period of validity of two years, commencing no earlier than the occurrence of the event giving rise to the requirement for the bond. The surety under the bond must be a member of a class specified in Schedule 2 to the Companies (Amendment)(No.2) Act 1999 Bonding Order 2000 – that is, a bank, building society, insurance company or credit institution.
Effective date of bond
A period of two years is prescribed by the Companies (Amendment)(No. 2) Act 1999 (Bonding) Order 2000 as the minimum period to be specified as being the period of validity of the bond, which period is to commence not earlier than the occurrence of the event which gave rise to the requirement to effect a bond. Furthermore, for new companies, the bond must be effective as at the date of incorporation.
With regard to new companies, the event which gives rise to the requirement to effect a bond is the incorporation of a company without a resident director. However, there is also a statutory requirement that the bond be furnished to the CRO pre-incorporation.
The CRO has implemented the following requirements in relation to the effective date of bonds received in connection with new companies: the effective date of the bond may not exceed four working days prior to the date of the company’s incorporation, exclusive of incorporation date.
Where the termination of a directorship leaves the company without a European Economic Area (EEA)-resident director, the company should lodge either a bond with the notifying the CRO of the termination of the directorship of the sole or last remaining EEA-resident.
Note: The total fee payable for the bond is €1849.99 and covers a period of two years, payable in advance. Please note once the Bond is issued it is non-refundable. In certain circumstances, International Companies setting up in Ireland may want to employ the services of a Nominee Irish Resident Director (Director per annum) in a non-executive capacity.