Non-Resident Director

Quick Summary

EEA Residency Requirement Explained

Irish company law requires that at least one director of a private limited company must normally live within the EEA. This includes all EU countries along with Iceland, Norway, and Liechtenstein.

“Resident” in this context generally means that the individual’s main place of living is within one of these countries.

This rule applies to all private limited companies in Ireland, including DACs. If your company does not meet this requirement, you must either appoint a suitable director or put another approved solution in place. There are no exceptions based on company size, type, or turnover.

What is a Non-Resident Director Bond?

If appointing an EEA-resident director is not suitable, companies can choose an alternative known as a Section 137 bond, often called a non-resident director bond.

This is essentially an insurance-backed solution that allows the company to operate without having an EEA-based director. The bond provides financial security of €25,000 to the Irish authorities.

Its purpose is to cover potential penalties if the company fails to meet certain legal obligations, particularly around filing annual returns and financial statements.

The bond is arranged through an authorised provider and typically runs for a fixed period, after which it must be renewed if the company still does not have an EEA-resident director.

Many international founders prefer this option because it allows them to retain full control of their company without bringing in an external director.

Compliance Options Comparison

Duties of a Non-Resident Director

Being based outside the EEA does not change a director’s responsibilities. Non-resident directors are subject to the same legal duties as any other director in Ireland.

These responsibilities include:

• Acting in the best interests of the company
• Exercising reasonable care and judgment
• Avoiding conflicts of interest
• Keeping accurate financial and statutory records
• Ensuring all filings and deadlines are met

In practice, managing these duties remotely can require extra effort. Staying informed, attending meetings, and responding to regulatory matters may take more planning.

Using reliable communication systems, appointing a competent company secretary, and working with professional advisors can make this much easier.

When Will You Encounter This Requirement?

Most people first come across the non-resident director rule during the company formation stage.

If you are based outside the EEA and looking to set up an Irish company, your formation advisor will usually explain this requirement early on and ask you to decide between appointing an EEA-resident director or using a bond.

Step-by-Step Compliance Roadmap

How to Appoint a Non-Resident Director

The process for appointing a non-resident director is the same as for any other director.

• If appointed during company formation, their details are included in the incorporation documents (Form A1).
• If appointed later, a Form B10 must be submitted within 14 days.
• The director must formally agree to the appointment, and their details — including name, nationality, and address — will be recorded on the public register.
• In addition, directors are required to provide a PPS number or, if unavailable, a foreign tax identification number.

Accuracy is important here, as incorrect information can delay the registration process.

Tax Considerations for Non-Resident Directors

Non-resident directors may still have Irish tax obligations depending on their involvement and whether they receive payment.

If a director earns fees or salary from the Irish company, that income is generally subject to Irish tax under the PAYE system, regardless of where they live. The company is responsible for applying the correct tax deductions.

However, Ireland has double taxation agreements with many countries. These agreements can reduce or eliminate tax being paid twice.

Because tax situations vary, it’s always advisable to seek professional guidance to understand your specific position.

Options for International Founders

If you are setting up a company in Ireland from outside the EEA, you have a few practical options:

• Appoint an EEA-resident director
• Use a non-resident director bond
• Apply for a “real and continuous link” exemption (less common)

The third option requires proof that your business has a genuine presence in Ireland, such as employees or physical operations. In reality, most companies choose either a bond or a nominee director.

Many service providers offer nominee director solutions, where an experienced EEA-based professional joins the board to meet the legal requirement. These arrangements are typically governed by formal agreements that clearly define roles and responsibilities.