A Section 137 bond for non-EEA resident directors starting a company in Ireland. It is a type of bond that serves as a guarantee for any potential liabilities or debts that the company may incur while the non-EEA resident director is in charge. The bond is usually required to be in place before the non-EEA resident director can take up their position which means it must be in place before you can proceed with company formation in Ireland.
The bond is typically issued by an insurance company or outsourced to a professional company formation agent, like Kinore. Let us take care of all the paperwork involved so you can focus on starting a business.
Who needs a Section 137 bond?
Any company that does not have an EEA-resident director needs a Section 137 bond. A non-resident director refers to a director that is not living in any of the EEA-member states.
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, Iceland, Liechtenstein, and Norway.
It’s important to note that Switzerland is an EEA member state even though Ireland has other arrangements with this state.
About the Section 137 Bond
Needs to be renewed every two years
Holds the value of €25,000
Must be in place before incorporation
How do I get a Section 137 bond?
The Surety of the bond must be a member of a bank, building society, an insurance company or a credit institution.
You can also outsource this process to a company formation expert like Kinore – we can take care of the whole process on your behalf as part of our Non-EU/EEA Company Formation Package. Our team of professional company secretaries are on hand to prepare all the Section 137 bond paperwork. We work with a trusted third-party financial institution to underwrite the bond.
What is a B67 form? Alternative to bond
A B67 form is an application for a Section 140 certificate stating that a company has a real and continuous link with one or more economic activities being carried on in the State.
If your company has an established presence in Ireland, you can apply for an exemption from this requirement. The company must have “a real and continuous link with one or more economic activities that are in carried on in the State”
The form needs to be accompanied by a statement from Revenue confirming the company has reasonable grounds to believe that the company has a “real and continuous link” with the State.
Your accountant can help you apply for this certificate. If you need help in this area, talk to our Client Services team about your situation.
What are the consequences of not having a bond?
It is a criminal offence not to have at least one EEA-resident director of an Irish-registered company or have a Section 137 in place.
Non-compliance with Irish Company Law may lead to the following:
- Unable to file Annual Returns on time leading to on-the-spot fines or high court order
- Involuntary strike-off
- You may be prosecuted
- Prosecution of company and directors
Frequently Asked Questions
How much does a Section 137 bond cost?
You can purchase a Section 137 Bond from Kinore for €2,475+VAT.
Do I need a non-EEA resident bond?
New companies (or companies with no economic activities in Ireland) need to have a Section 137 bond if there is no director in your company that is resident in the EU or EEA. These companies are obliged to have a bond for as long as the company is registered.
How to incorporate an Irish company with a bond?
You must apply to a bank, building society, an insurance company or a credit institution for the bond. Once you have secured the bond, the original bond and a certified copy, needs to be submitted to the CRO with the Form A1 and Constitution.
Let us take care of the whole process. We have helped hundreds of businesses set up in Ireland and we guide you each step of the way.
Rachel is a certified company secretary from The Law Society College Dublin and currently leads the Company Secretarial Team at Kinore. Areas of expertise include Company Formation in Ireland and the UK, Company Secretarial procedures and regulations, and the Companies Act 2014 relating to small business and company directors.
