Brexit Transition Period for ROI Companies: Revenue Bond

The UK may have exited the EU on 31st January 2020 however, there will be a transition period running until 31st December 2020. Until then the UK’s relationship with the EU, at least from a trading and regulation perspective, will remain unchanged and the UK remains in the single market and customs union. As a result, there are currently no visa requirements for workers, extra charges or checks being introduced for imports and exports, or revenue bond requirements on Irish companies with only UK directors.

Section 137 Revenue Bond Requirement

During the transition period Irish companies with only UK directors continue to be exempt from the requirement in Section 137 of the Companies Act 2014 which states that every Irish registered company must have at least one director who is a resident in the European Economic Area (EEA). The EEA consists of the EU member states in addition to Iceland, Liechtenstein, and Norway.

However, there are two further options to ensure compliance with Section 137:

Section 137 Bond

The first option is the arrangement of a bond to the value of €25,000 for a minimum period of two years. The company must renew and submit the next bond to the CRO before the expiration of the existing bond. The purpose of the bond is to act as an insurance for the company to pay a fine or penalty imposed upon it under the 2014 Act or the Taxes Consolidation Act 1997.

Section 140 Certificate

Another option is a Section 140 certificate which exempts a company from the EEA director requirement. This can be obtained by making an application to the Revenue Commissioners supporting the position that it has “reasonable grounds to believe that the company has a real and continuous link with one or more economic activities being carried out in the State.”

This is established by satisfying at least one of the conditions of Section 140(9) of the Act. However, the certificate is only available for existing companies, not those which are newly incorporated as they will be unable to demonstrate a real link at the point of incorporation.

After receipt of the statement from the revenue an application must be made to the CRO within two months.

If the link ceases the company must either appoint an EEA resident or establish a bond.


The Act provides an exemption for subsidiaries where a guarantee is given by the parent company to cover liabilities.

The exemption only applies where the parent company is established and registered in an EEA state. Therefore, a no-deal Brexit would prevent Irish subsidiaries of UK companies from relying on the exemption.


Non-compliance with Section 137 is a Category 4 offence which can result in a fine of up to €5000. In addition, the Registrar has the power to strike a company off the register.

For more information on the bond requirement or on setting up your own company in the Republic of Ireland, contact us via our website or give us a call on 028 9055 9955.