Setting up a company in Ireland can be attractive to new Startups or existing business owners who want to move their business to a different country.
Ireland has a relatively low Corporation Tax rate and a diverse and talented Irish workforce. Residing within the European Economic Area (EEA) also provides access to the rest of the EU.
But what do you do if you are a company director who doesn’t live in Ireland or an EEA country?
If you’re not a resident in an EEA country, you may need to purchase a Section 137 Non-EEA Resident Bond. This is an extra step, which can slow down the process, but with the help of professionals, it is done in a straightforward and quick manner.
Firstly, what are the European Economic Area (EEA) countries?
The EEA consists of the 28 member states of the EU. Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom, additionally Iceland, Liechtenstein and Norway.
If you’re a resident of one of the above countries, you don’t need to read on. You can go ahead and read more about company registration in Ireland.
Be aware that Switzerland is not part of the EU or EEA. Therefore if you’re living there, or in any country not listed above, you may be considered a non-EEA resident company director, and, therefore, may need to purchase a non-EEA resident bond.
“Resident”, “nationality”, “domicile”, and “citizen”… what is the difference, and how does it affect registering a company in the state?
To set up a company in Ireland, you must consider where you live/resident. In other words, if you consider your home outside of the EEA, you are considered a non-EEA resident.
For example, you have an Irish passport, and you live in Dubai. Therefore you’re a non-EEA resident.
Being “resident” somewhere refers to where a person lives permanently or on a long-term basis.
The “nationality” of a person is the country where you come from or are born.
If you consider somewhere to be your “domicile”, you are referring to a certain country you treat as your permanent home or have a substantial connection with.
As a “citizen”, you have legal rights in a particular country, usually, the country you were born in or somewhere you have been legally accepted.
What conditions apply to non-EEA resident directors registering a company in Ireland?
In order for a non-EEA resident director to set up a company in Ireland, the company must fulfil one of the following:
- Purchase a non-EEA resident director bond
- Appoint an EEA resident director
- Apply to the Registrar of Companies for a Section 140 certificate that states that the company “has a real and continuous link with one or more economic activities that are being carried on in the State”.
Directors who are non-residents starting a company in Ireland or directors without a PPS number must fulfil the obligation of obtaining a Verified Identity Number (VIN) by completing the necessary Form VIF.
The Verified Identity Number (VIN) serves the purpose of validating an individual’s identity.
Purchase a Section 137 Non-EEA Resident Director Bond
The Section 137 Non-Resident Director Bond exempts companies registered in Ireland from the requirement to have a director who is resident in the EEA (European Economic Area plus Iceland, Norway and Liechtenstein).
With this bond, you don’t have to change your company structure or delay incorporation.
What does the Section 137 Non-EEA Resident Director Bond cover?
The bond insures the company, and its purpose is to cover the event of a company failing to pay the following:
- a fine due to an offence under the Companies Act 2014
- a fine due to 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
To ensure your company complies with its regulatory requirements, talk to our Client Services Team about outsourcing your obligations. Our team of expert ICSA-qualified company secretaries and chartered and certified accountants are on hand to take care of the complexities of running a business in Ireland.
When to take out the bond?
The Companies Act 2014 requires a 2-year minimum period of validity. The validity period should commence when the company is being incorporated without an EEA-resident company director, or as soon as the company has removed its final EEA-resident company director.
The process of company registration when you need to purchase a bond
You will be asked for information about the directors, shareholders, and company, in order to complete the company registration and Section 137 non-EEA resident bond paperwork
Our expert team will take care of all the paperwork and liaise with the Companies Registration Office (CRO) and the third-party bond provider on your behalf
Appoint an EEA-resident director
In this digital age, it’s perfectly possible to have one director living in the EEA and one director outside the EEA. With modern communication platforms, such as Slack, Trello and Zoom and cloud storage, such as Google Drive, directors can communicate easier than ever!
Company registration with at least one EEA-resident director meets the conditions to set up in Ireland, so now you’re ready to register your company.
Establish a real and continuous link with economic activities in Ireland
These economic activities can include evidence of Irish employees, suppliers or customers. Revenue will seek proof of trade in Ireland, and each company may have different means of doing so. This means you may need to seek advice from an accountant to discuss your specific circumstance.
It’ll be difficult to show any proof of linking to the state within your first two years after incorporation. So we advise you to think about your economic activity before considering company formation in Ireland. Generally, purchasing the bond upon incorporation and building a relationship with Ireland over that period of the first bond, gives you sufficient time to demonstrate a real and continuous link. But remember that speaking to a professional will help clear any doubts because each case is different.
Frequently Ask Questions
Can you open a company with a Visa?
If you have a non-EU passport and are living in Ireland or a different EEA country on the appropriate Visa, you may not need to follow the conditions. You can consult with the INIS office (Irish) to understand if you can set up a company here whilst on a Visa.
What happens if a director does not have a PPS number?
If you find yourself without an Irish PPS number, you must apply for a Verified Identity Number (VIN) by completing a Form VIF (VIN) – Declaration of Verification of Identity. Each director must only have one VIN, which can be utilised for future filings, such as the Annual Return and Directors Return.
Failure to possess a PPS number or a VIN as an Irish Limited Company director may result in being charged with a category four offence, carrying a fine of €5,000. If you require assistance with the Verified Identity Number application process, please contact our team today. We are here to provide the necessary help.