EUROPEAN ECONOMIC AREA-RESIDENT DIRECTOR

Here, we set out the circumstances in which a company may wish to cause to be appointed a director resident in Ireland.

Residency Requirement

A company must have, at all times, at least one director who is ordinarily resident in the European Economic Area. The European Economic Area consists of the 27 Member States of the European Union, plus Iceland, the Principality of Lichtenstein and the Kingdom of Norway. Note, while a member of the single market, the Swiss Confederation is not a European Economic Area State. Following its withdrawal from the European Union, the United Kingdom of Great Britain and Northern Ireland is not a European Economic Area State.

Determining Residency

For the purpose of determining whether a person intending to hold office as director is resident in the State, any one of the following must apply:

  1. In the previous 12 months, the person was present for at least 183 days in the aggregate;

  2. In the previous 24 months, the person was present for at least 280 days in the aggregate; or

  3. A person who was not resident in the State in a year of assessment under the Taxes Consolidation Act, 1997 elects to be treated as having been so resident in the State: Provided he or she has the intention to be so resident in the following year of such assessment.

To be present in the State, the person must be personally present on one or more occasions in the State at any time during any particular day.

Where Residency Requirement Not Satisfied

If a company cannot satisfy the requirement that at least one of its directors be resident in the State or the European Economic Area, generally, it must seek alternative arrangements; of which there are three.

Alternative Arrangements

Those three alternative arrangements, from which a company may elect any one, are outlined as follows.

First, the company may hold a bond to the value of €25,000.00. This bond, which has a currency of two years, provides for the payment of the whole or part of certain fines or penalties imposed on the company under the Companies Act, 2014 and the Taxes Consolidation Act, 1997.

Second, the company may, subject to qualifying conditions, apply for a certificate from the Registrar of Companies. This certificate states the company has a real and continuous link with at least one economic activity being carried on in the State. The qualifying conditions referred to are that the company obtains from the Revenue Commissioners a written statement which states that, within the previous two months of the date of the application, the latter has reasonable grounds to believe that such a real and continuous link exists. In order to satisfy the Revenue Commissioners that such a real and continuous link exists, the company must satisfy at least one of the following conditions:

  1. That the affairs of the company are managed by at least one person from a place of business in the State, which person is authorised by the company to act on its behalf;

  2. That the company carries on a trade in the State; or

  3. That the the company is a subsidiary of a company, a subsidiary of another subsidiary, or a holding company of a company which satisfies at least one of the foregoing conditions.

Third, the company may retain a trust or company service provider authorised to provide director services in Ireland to appoint a person to hold office as director. It is this alternative to which the following relates.

Retaining Jáuregui-Hogan to Provide Director Services

At the outset, it must be noted that this service is not one of general availability. That is to say, Jáuregui-Hogan will hold a conference with the company to ascertain whether it qualifies for this service. It may be helpful to consider, as a guiding principle, that a qualifying company is one which shares our conservative attitude towards risk.

During this conference, which may be up to three hours in duration, Jáuregui-Hogan will conduct thorough enquiries into the affairs of the company, its beneficial owners and its officers. The content of the conference, including any matters discussed therein and any documents submitted to us, are held in the strictest confidence; and you will benefit from the discretion we afford to each of our Clients. We will also conduct our own due diligence in respect of the business of the company independent of the information and documents submitted to us. This process may take up to one week to confirm; though in cases of Clients having an established business relationship with us, this process may be shorter. In either case, a determination will be made once we are satisfied we have made all necessary enquires.

If it is held that a company qualifies for this service, we will communicate this fact to you and, should you instruct us to proceed, we will draft an agreement to that effect. This agreement outlines the rights and obligations of Jáuregui-Hogan and the Client, and has a currency of one year. These obligations are, inter alia, the requirement that the company have, at least, a weekly conference with Jáuregui-Hogan and the person holding office as director; and that the company acknowledges that director has fiduciary and other duties which may be exercised independently of the general instructions of the company.

Our professional fees to hold office as director in this capacity are €1,079.33 per annum, including value-added tax.