Have you heard of Irish Company Bonds? The Irish Revenue have long had a requirement that Irish Companies need to have at least one company director who is resident in the European Economic Area (EEA). Up until the 1st of January 2021, this presented no issue for Northern Irish people running Irish companies. With Brexit‘s implementation, things are different
Under Section 137 of The Companies Act 2014, any Irish Company that does not have one EEA resident director must purchase a bond to insure the company for a sum of $25,000. This bond must be refreshed every two years and covers the following risks:
- Any fine imposed on the Company in respect of offences under the Companies Act 2014 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 S1071 or S1073 of the Taxes Consolidation Act 1997.
- Any expenses incurred in recovering the fines and penalties mentioned above
Worst of all, while the Irish Revenue are yet to act upon these new rules, any directors currently in control of Irish Companies must now be prepared for a letter or email from the Irish Companies Registration Office (CRO) demanding evidence that this bond has been purchased as soon as the CRO notices the company has no EEA resident directors.
These bonds cost roughly €2,000 to €3,000 from Secretarial Services Companies.
The Alternative to Irish Company Bonds
The only way to avoid this bond, is to ask the Irish Revenue for a written letter agreeing that your company has “A Real and Continuous Link” with the Irish State. The conditions for this link are that the company is currently running an Irish Payroll or is carrying on a trade in the state. Unfortunately, this is impossible for a newly incorporated company to receive as Irish based employees would have to be in place prior to applying and you cannot run an Irish Payroll without first registering your company with the Irish Revenue.
Unfortunately there appear no bright spots to these new rules. They’re simply a very expensive and new cost of doing business if you wish to operate an Irish Limited Company.