What is a Section 137 Bond?
A Section 137 Bond, sometimes called a Revenue Bond or Non-Resident Director Bond, is a financial guarantee required under Section 137 of the Companies Act 2014. It is a form of surety bond, not insurance, and it exists to protect the Irish State against unpaid fines or penalties if a company breaches its legal obligations.
The bond guarantees €25,000. That is not what you pay. It is the maximum amount the bond will pay out to the State in the event of non-compliance. The actual cost to your company is an annual premium, typically between €1,500 and €2,050 for a two-year period, paid to a licensed bond provider.
The bond is required when an Irish-registered company does not have at least one director who is ordinarily resident in the European Economic Area. It was introduced to give the Irish authorities a level of financial recourse against companies whose directors are entirely outside EEA jurisdiction.
Who needs a Section 137 Bond?
You need a Section 137 Bond if all of your company's directors live outside the EEA. The EEA comprises the 27 EU member states plus Iceland, Norway and Liechtenstein.
You do not need a bond if at least one director lives in Ireland or any other EEA country.
Common situations where a bond is required:
- A US, UK, Australian, Canadian, Chinese or Indian founder incorporating in Ireland with no EEA-resident co-director.
- A company whose sole director is based in the UK (UK residents have been non-EEA since 1 January 2021, see the Brexit section below).
- An international company setting up an Irish subsidiary where all parent company directors are based outside the EEA.
The €25,000, what it actually means
This is the single most common point of confusion. When founders hear "Section 137 Bond of €25,000" they often assume they must hand over €25,000 in cash. They do not.
The €25,000 is the bond value, the maximum amount the bond provider will pay out to the Irish authorities in the event that your company fails to meet its legal obligations (for example, unpaid CRO fines or Revenue penalties). It functions like a performance bond in construction: the contractor does not pay the full bond amount upfront. They pay a premium, and the bond provider pays out only if the contractor defaults.
What you actually pay is a premium to a licensed Irish bond provider. In 2026, the typical market rate for a Section 137 Bond is:
- €1,500 to €2,050 for a two-year period (inclusive of VAT).
- Non-refundable, even if you later appoint an EEA-resident director.
- Renewable at the end of the two-year term if the director situation has not changed.
The Brexit effect: UK directors
Before 1 January 2021, a UK-resident director qualified as an EEA-resident director for Irish company law purposes. That changed when the UK left the European Union. Since Brexit, UK residents are treated as non-EEA for the purposes of Section 137.
This affects two groups in particular:
- UK founders forming new Irish companies: if all directors are UK-based, a bond is now required.
- Existing Irish companies with UK-resident directors: if your EEA compliance relied on a UK director and you have not updated your structure, your company may already be non-compliant.
The requirement is based on residency, not citizenship. A director holding an Irish or EU passport who lives in London is still non-EEA for Section 137 purposes. A director with a US passport who lives in Dublin is EEA-compliant.
How long does it take?
The Section 137 Bond application process takes approximately 7 to 10 working days from the date you submit your signed application to a bond provider. This adds time to your overall company formation timeline.
A standard Irish company formation (with an EEA-resident director) typically completes in 3 to 5 working days. With a Section 137 Bond, allow 2 to 3 weeks in total from starting the process to receiving your Certificate of Incorporation.
The application process requires:
- Signed bond proposal form from a company director and the company secretary.
- Details of all directors and shareholders.
- Proposed company name and nature of business.
- Payment of the bond premium.
Workhub can arrange the Section 137 Bond as part of the Company Formation + Business plan. We manage the paperwork and liaise with the bond provider directly.
Alternatives to the Section 137 Bond
The bond is not your only option. There are two main alternatives.
Option 1: Appoint an EEA-resident director
If you appoint even one director who is ordinarily resident in Ireland or another EEA country, the bond requirement disappears entirely. This director does not need to be involved in day-to-day operations. A non-executive director role is sufficient for compliance purposes.
Note: the director must be genuinely resident in the EEA, not merely a citizen. A nominee director service where the individual is actually based in the EEA satisfies the requirement. Workhub does not provide nominee directors but can refer you to regulated providers.
Option 2: Real and continuous link certificate
If your company can demonstrate a genuine, substantive connection to Ireland, for example it employs people in Ireland, has a physical trading premises here, or carries out the majority of its operations from Ireland, you can apply to Revenue for a certificate confirming a "real and continuous link" with economic activities in the State. If granted, this certificate exempts the company from the bond requirement.
In practice, this route is rarely available to companies at the point of formation. It requires demonstrated activity, not just intent. It is more commonly used by established companies who have built up a genuine Irish presence over time.
What happens if you do not have a bond?
Failing to have a Section 137 Bond in place when required is a criminal offence under the Companies Act 2014. The consequences include:
- Rejection of your company formation application by the CRO.
- Prosecution of the company and its officers if the company attempts to operate without one.
- Fines and penalties.
- Difficulty opening an Irish business bank account (banks conduct their own checks).
- Risk of involuntary strike-off if the breach is discovered after incorporation.
The CRO checks for EEA-resident director compliance at the point of registration. If no EEA director is listed and no bond is in place, the A1 form will be rejected.
The bond at renewal: what happens after two years?
The Section 137 Bond is valid for two years from the date of issue. As the renewal date approaches, your company has three options:
- Renew the bond: pay another premium for a further two-year period. This is the simplest option if your director situation has not changed.
- Appoint an EEA-resident director: once you have an EEA-resident director on the register, the bond is no longer required. You do not need to wait until the bond expires to make this change.
- Apply for a real and continuous link certificate: if your company now has genuine substantive operations in Ireland, you may qualify for the exemption described above.
There is no automatic renewal. You must actively renew, appoint a director, or obtain the exemption. Allowing the bond to lapse without taking one of these steps puts your company in breach of Section 137.
Summary: do you need a Section 137 Bond?
| Your situation | Bond required? |
|---|---|
| At least one director lives in Ireland or the EEA | No |
| All directors live outside the EEA (US, UK, Australia, etc.) | Yes |
| All directors are UK residents (post-Brexit) | Yes |
| Director holds EU passport but lives outside EEA | Yes (residency, not citizenship) |
| Company has a real and continuous link certificate from Revenue | No |
This article is for informational purposes only and does not constitute legal advice. Irish company law requirements are set by the Companies Act 2014. For advice specific to your situation, consult a solicitor or regulated company formation agent. Workhub is a licensed TCSP regulated by the Department of Justice of Ireland.