Are You at Risk from a No Deal Brexit?

Are You at Risk from a No Deal Brexit?

No Deal Brexit

As Brexit continues to rumble on with our nearest neighbours. Companies in Ireland could be at risk of breaching Irish Company Law should a No Deal Brexit happen. Under current Irish law. It states that Irish companies must have at least one director that resides in the EU or EEA. Currently, director’s resident in the UK qualify. However, overnight this would change if a No Deal Brexit happens. What does this mean? It means that Irish Companies could be forced to appoint a new director that is an EEA resident to avoid any penalties. So, are you at risk from a No Deal Brexit?

There are a few things Irish companies can put in place to protect themselves in advance of any ramifications from Brexit with regard to non EEA resident directors.

Firstly, you can simply appoint another director in the company who is resident in the EEA but outside the UK of course.

What this appointment will do is mitigate the company compliance risk should there be a No-Deal Brexit.

Also, if you are an international company looking to set up a business in Ireland. You may want to employ the service of an Irish resident director. This could be in an executive or non-executive capacity and we at Citytrust can assist you with this.

Secondly, your company could have to put in place a Section 137(2) Bond which is a €25,000 bond with a minimum period of validity of two years. Then in two years’ time further actions will be required.

Fines being issued for withholding or not supplying certain information to Revenue. Also, this bond covers penalties the company may be liable to pay under the Taxes Consolidation Act 1997. It will also cover the cost in recovering any of the above fines mentioned.

Thirdly, an application to certify that your company has a tangible, continuous and real link with the State.

What this means is that there is a requirement by the company to create local employment and which in turn has economic links that will require the approval by Revenue. This option is very rarely used in practice, as it is so difficult to achieve.

Finally, if you’d like to find out more about the options we’ve highlighted in relation to Directorship services and company compliance. Please get in touch today on +353 1 6753140 or via email at enquiries@citytrust.ie and we’ll be happy to help.