Irish Company Law Implications for Brexit - Time to Act!

The United Kingdom exited the EU on the 31st January 2020 with a transitionary period in place until 31st December 2020. 

During this transitionary period the UK continued to follow all EU regulations however as we are at the end of the transitionary period there are several Irish Company Law implications that companies must now take action on to address the impact of Brexit on their corporate governance obligations.

We set out below the key considerations from a company law perspective.

EEA Resident Director

The Companies Act 2014 (the ‘Act’) imposes an obligation on Irish registered companies to have at least one director resident in the European Economic Area ‘EEA’ irrespective of nationality. Any company that relies on a UK resident director to satisfy this requirement of the law will now need to consider alternative options. There are a number of options available to companies that are relying on directors UK residency status and these are summarised as follows;

  • Appoint an EEA/Irish resident director to the board; 
  • Apply for a non EEA resident bond* from an insurance company; 
  • Apply for a certificate of a real and continuous link** with economic activity in the State.

* The non EEA resident bond insures the company to the value of €25,000 in the event the company fails to pay any fine or penalty under the Act or the Taxes Consolidation Act 1997. Once secured, the bond will be in place for two years and is to be renewed every two years until such a time an EEA resident director is appointed to the board.

**A company can apply for a certificate of a real and continuous link with economic activity in the State however there are certain conditions to be met before the Revenue Commissioners will provide written proof of a real and continuous link with one or more economic activities being carried on in the State. The main conditions to be satisfied are;

  • The affairs of the company are managed by one or more persons from a place of business established in the State and such person(s) are authorised to act on its behalf; 
  • The company carries on a trade in the State.

Exemption from Filing Individual Entity Financial Statements

An Irish company can avail of an exemption under section 357 of the Act from filing its entity financial statements with the Companies Registration Office whereby the company subject to certain conditions being met, files the consolidated financial statements of its parent company.

This filing exemption is only available where the holding undertaking is established under the laws of an EEA country, following the end of the Brexit transitionary period, an Irish company with a UK holding undertaking may no longer be in a position to avail of this exemption and will be required to file its own entity financial statements with the Companies Registration Office.

This may have a significant impact on groups and their subsidiaries that rely on this exemption by filing the financial statements of a UK Holding Company.

Group Financial Statements

The Act provides under section 299 that a holding company is exempt from the requirement to prepare group financial statements if that holding company is itself a subsidiary undertaking and its holding undertaking is established under the laws of an EEA State together with certain conditions being met. Such companies that are held by UK parent undertakings will no longer be able to rely on this exemption.

There is an alternative filing exemption under section 300 of the Act which applies where the holding undertaking is not established under the laws of an EEA State however the conditions to be satisfied under this section are more restrictive than the criteria for section 299.

Therefore if your company now needs to file local financial statements then previously undisclosed and potentially commercially sensitive information may now need to be filed on public record.

UK Auditors

At present some Irish companies use auditors registered in the UK to provide audit services on their Irish Companies, as a result of the UK no longer being part of the EEA, UK registered auditors are no longer permitted to issue opinions in this jurisdiction and companies may have to appoint new audit firms.

Alteration of Financial Year End

The Irish Companies Act permits a company to change its financial year end once in every 5 years. This five year rule does not apply where an Irish company is a subsidiary undertaking or a holding undertaking of another EEA undertaking, this exemption allows for the financial year ends of multi- company structures to be aligned subject to the EEA undertaking requirement. As the UK is no longer part of the EEA, this exemption will no longer apply.

Irish Branches of UK Companies

UK companies with Irish branches will be subject to registration and compliance requirements as a non EEA branch which are more stringent to that of an EEA branch.


While a post Brexit environment is still uncertain, it is important that Irish companies take the necessary steps to ensure compliance with the Act. It is not too late for all companies to examine their links with the UK and determine how they might be affected by the departure of the UK from the EEA.

If you would like to discuss the above issues or any other Brexit related issues please contact: