A Section 137 bond lets an Irish company operate without an EEA-resident director. Chern & Co arranges and files the two-year, EUR 25,000 statutory bond as an authorised TCSP, from EUR 2,000. It is the fastest way for non-EEA founders to meet the Companies Act 2014 director requirement without appointing a nominee.
Section 137 of the Companies Act 2014 requires every Irish company to have at least one director resident in an EEA member state. An alternate director does not satisfy the requirement, and non-compliance is a criminal offence.
A company with no EEA-resident director can meet the requirement instead by holding a bond in the prescribed form, in the sum of EUR 25,000. The minimum period of validity is two years, prescribed by the Companies Act 2014 (Bonding) Order 2015. The bond lets a non-EEA founder act as sole director without appointing a separate EEA-resident director. For the requirement itself and who it applies to, see our guide on when an Irish company needs an EEA-resident director.
The bond is a guarantee given to the Irish State. It is not insurance for you, and it is not a substitute for filing on time. It covers:
Total liability under the bond cannot exceed EUR 25,000 over its period of validity.
Three things that catch people out:
The bond is a third-party insurance product, so the premium is provider-dependent. As a guide, a two-year bond costs around EUR 2,000. It is non-refundable and must be renewed every two years for as long as the company has no EEA-resident director. We arrange the bond and file it with your incorporation, so there is nothing separate for you to organise.
For the five-year cost of each route side by side, see our comparison of the section 137 bond against a nominee director.
At incorporation. If none of the proposed directors is EEA-resident, the bond goes in with the incorporation, so the company is compliant from its first day.
When the only EEA-resident director resigns. This is the case that goes wrong. The requirement applies from the moment that director ceases to hold office, and the company is in breach until a bond or a replacement director is in place. The Form B10 notifying the change is due within 14 days under section 149(8). The practical rule is not to file the B10 until the bond or the replacement is secured: a filed B10 cannot be withdrawn, and filing it first puts the gap on the public register.
If you are in that position now, talk to us before you file anything.
Non-EEA founders meet the Section 137 requirement in one of two ways:
Section 140 exempts a company from the Section 137 requirement where it has a real and continuous link with one or more economic activities carried on in the State. The exemption is not self-certified. The company applies to the Registrar of Companies on Form B67, and the application must be supported by a statement from the Revenue Commissioners, made within two months of the date of the application, that Revenue has reasonable grounds to believe the link exists.
Revenue looks for one of the following: the affairs of the company are managed from a place of business in the State; the company carries on a trade in the State; the company is a subsidiary or a holding company of a company that meets either of those; or the company is a subsidiary of a company whose parent meets either of those.
In practice this route suits a company that is already trading here with real substance. A newly incorporated company with no Irish activity yet will not qualify, which is why most non-EEA founders start with a bond or an EEA-resident director and look at Section 140 later.
Any Irish private company (LTD) whose directors are all resident outside the EEA, unless it holds the Section 140 exemption. This most often applies to non-EEA founders incorporating remotely. Our non-resident company formation package includes an EEA-resident director as standard; the bond is the alternative if you would rather be the sole director.
As an authorised Trust or Company Service Provider (TCSP) we arrange the Section 137 bond and file it as part of your company formation. Contact us and we will confirm the current premium and handle the paperwork.
Contact us to arrange your Section 137 bond
How much does a Section 137 bond cost?
It is a third-party product with provider-dependent pricing. As a guide, around EUR 2,000 for a two-year term, non-refundable.
How much does the bond cover?
EUR 25,000 in aggregate, towards fines under the Companies Act 2014 and fines and penalties under the Taxes Consolidation Act 1997 in the categories set out above.
How long does it last?
Two years is the minimum period of validity prescribed by the Companies Act 2014 (Bonding) Order 2015. It must be renewed while the company has no EEA-resident director.
What happens if we have neither an EEA-resident director nor a bond?
The company is in breach of Section 137, and non-compliance is a criminal offence. It is also a practical problem: the position is visible on the public register, and Irish banks read it.
Does the bond protect me personally as a director?
No. It responds to fines and penalties on the company in the prescribed categories. It is not director insurance.
Can we switch from the bond to a resident director later?
Yes. Appoint the EEA-resident director, and the bond is simply not renewed at the end of its term. The premium already paid is not refundable.
Does an alternate director count?
No. The CRO is explicit that an alternate director does not satisfy the Section 137 requirement.
Bond or resident director, which is cheaper?
The bond is usually the lower upfront cost if you act as sole director; a resident director service is an annual service. We can advise based on your plans.
€2.000 excl. VAT
Tailored Section 137 Non-EEA Resident Director Bond Service solutions for non-EEA director appointments, ensuring regulatory compliance
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Chern & Co Ltd is a Trust and Company Service Provider (TCSP) in Ireland, authorised and supervised by the Department of Justice.
Our official registration reference is TCSP APP/1211/2018, and we are listed in the public TCSP register maintained by the Irish Anti-Money Laundering Compliance Unit.
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