Establishing a 'Real and Continuous Link' for Your Irish Company to Avoid the Non-Resident Bond

Understanding the ‘Real and Continuous Link’

The ‘Real and Continuous Link’ is a legal concept in Irish tax law that serves to distinguish between companies that are genuinely conducting business activities in Ireland and those that are merely using Ireland as a tax shelter without a substantial presence in the country. This concept is crucial for determining whether a company qualifies for the benefits of Irish tax residency, including a reduced corporate tax rate.

The Irish Revenue Commissioners use various criteria to assess whether a company has a ‘Real and Continuous Link’ to Ireland. These criteria include the location of board meetings, the management of the company’s affairs, the presence of key decision-makers in Ireland, and the level of economic activity conducted within the country.

Tips for Establishing a ‘Real and Continuous Link’

• Maintain a Registered Office in Ireland: One of the first steps to establish a ‘Real and Continuous Link’ is to have a registered office in Ireland. This provides a physical presence and an official address for your company in the country.
• Appoint Irish Resident Directors: Having Irish resident directors who actively participate in the management of the company can strengthen your case for a ‘Real and Continuous Link.’ These directors should be involved in strategic decision-making and be physically present in Ireland for board meetings.
• Conduct Core Business Activities in Ireland: To demonstrate a genuine link, it’s essential to conduct significant business activities within Ireland. This includes having a physical presence such as offices, employees, and customers in the country.
• Maintain Comprehensive Records: Keep detailed records of board meetings, financial transactions, and other business activities conducted in Ireland. This documentation can serve as evidence of your company’s substantial presence in the country.
• Establish Banking Relationships in Ireland: Maintain bank accounts with Irish financial institutions and conduct your financial transactions through these accounts. This further demonstrates a commitment to operating within the Irish business environment.
• Seek Professional Advice: Consult with tax and legal experts in Ireland who are well-versed in the ‘Real and Continuous Link’ requirements. They can help you structure your company’s operations in a way that aligns with Irish tax regulations.
• Stay Informed: Keep up to date with changes in Irish tax laws and regulations, as these may affect your company’s compliance with the ‘Real and Continuous Link’ criteria.