Non-EEA directors or Shareholders when forming a company?

wrongtarget

Hey guys,

I would really appreciate your help with a couple of issues I'm having trying to set up a business with an Irish colleague and some family members.
This has been a nightmare. I've been sent from a Company formation service to my local Dublin City Enterprise Board then to the Department of Justice, and nobody is sure of what they are saying and everybody gives me contradicting information.

Now, me and my family are from Venezuela. I'm the only one currently residing in Dublin but I'm under a student visa and I'm applying for a Third Level graduate Scheme visa in a few months that will allow me to work full time but not self employed.

From what we know, to form a company in Ireland you need at least two directors, one of those has to be from the EEA. We're covered with that with my Irish friend. The problem is with the second director and shareholders. These are my question. I'd love if any of you could give me some insight on this or point me somebody who really knows.

1. As a non-eea under a student visa residing on Ireland can I be a director of a company? If not can I be a shareholder?
2. Can a non-eea not residing in Ireland be a founding director of a company? Or can they be a shareholder? Wonder how would be the process for somebody that's not in Ireland to sign any of the formation documents and such.

Thank you very much

pedroeibar1

While there are several issues mentioned, the key issue is one of employment. I would suggest that on student/non-work visa you cannot be a director in the situation you describe as you would be viewed as an employee. However, if you were ‘non-executive’ i.e. genuinely not actively involved in the daily affairs/running of the company a case could be made to allow it - if OK, you just put your nationality in brackets after your name on the company stationery, accounts, etc.

When a company is being created there are three ‘classes’ of people - promoters, shareholders and directors. You need to examine your role(s) against each of these.
1. The promoters of a company are those who incorporate it. They owe a fiduciary duty to the shareholders and to the company. The promoters inevitably are the first employees in a start up.

2. A shareholder has a legal identity separate from the company itself. There are no major issues with having non-resident shareholders

3. Directors hold a position of trust, having a fiduciary duty to the company. The Courts are increasingly taking the view that they also have a duty to the ‘stakeholders’ which by extension includes staff and creditors. That involves work, for which you do not have a permit, so you would be in breach of your visa conditions.

All companies must have at least two directors (at least one of whom must be an EEA resident) and a secretary. A director may also act as secretary. A company may be exempted from the one EEA resident director if the following conditions are met:
(a) the company holds a bond, to the value of €25,394.76; or
(b) the company holds a certificate granted by the CRO stating that the company has a real and continuous link with one or more economic activities that are being carried on in the Republic of Ireland. (You need to firstly apply to the Revenue for this, then bring the paperwork to the CRO.)

For signing documentation you could courier documents over/back or have the overseas people grant a limited power of attorney to somebody to sign on their behalf.

Any company formations business should be able to advise you as part of their service.

wrongtarget

Surprisingly, they have not been able to advise me Pedro.
In two different services they've replied to me saying that they couldn't assist me with my questions and referred me to some other entity.

Thank you very much for your detailed reply. I'm still puzzled about my point 2.
So, can non-EEA person not residing in Ireland be a director and promoter of a company?

wrongtarget

Also, you've made clear that it would be a breach of my visa to be a director of a company. In your opinion, would also be a breach if I were a shareholder? Sorry if I'm being redundant.

EDITED: I confirmed with CRO that a non-eea person not residing in Ireland can be a director and shareholder of a company. Since our first director is Irish, that's settled in the matter.
Now the question remain as to whether myself, under a student visa, could be a shareholder. CRO thinks I could since strictly speaking shareholders are not employees, but they say only the Department of Immigration could assist me on that. I've gone to Immigration twice and in both opportunities they tell me they don't know, that I should ask X or Y. I don't know what to do anymore, it's very frustrating.

pedroeibar1

wrongtarget wrote: »

Also, you've made clear that it would be a breach of my visa to be a director of a company. In your opinion, would also be a breach if I were a shareholder? Sorry if I'm being redundant.

EDITED: I confirmed with CRO that a non-eea person not residing in Ireland can be a director and shareholder of a company. Since our first director is Irish, that's settled in the matter.
Now the question remain as to whether myself, under a student visa, could be a shareholder. CRO thinks I could since strictly speaking shareholders are not employees, but they say only the Department of Immigration could assist me on that. I've gone to Immigration twice and in both opportunities they tell me they don't know, that I should ask X or Y. I don't know what to do anymore, it's very frustrating.

You are missing the point in the above – there never was an issue with a non-EEA person not resident in Ireland being a director and / or a shareholder of a company. The issue you face is one of ‘employment’ rather than anything else. You are resident in Ireland on a student visa. You need an immigration lawyer to advise you if your appointment as a director of a company registered in Ireland would constitute ‘employment’ – in my view it would, as I said above.

You mentioned in an earlier post that you would be eligible for a work visa in a few months - if you do not want to go to a lawyer why not wait until then, after which the employment question would not arise? You do not want to find yourself in a position in a few months whereby a breach of the rules today (or a different interpretation by another official) could jeopardize the issuance of a work visa in a few months. In fairness, the CRO are correct, it is an immigration issue.

wrongtarget

Pedro,
I'm insisting about the non-EEA not resident in Ireland because an alternative we have planned regarding the formation is for me not to be a director, but one of my family members which would also be involved in the business but don't live in Dublin. The work visa that I will be getting in a few months still doesn't allow me to be self-employed, so even then I wouldn't be able to take that position.
I could however be an employee of the company, which is fine by me.
Now I only need to figure out whether being a shareholder would be considered self-employment too.

pedroeibar1

wrongtarget wrote: »

Now I only need to figure out whether being a shareholder would be considered self-employment too.

Log on to any sharedealing site tomorrow. Buy a share(s) in any quoted company. Now, does that make you an employee? A shareholder is an owner of a share or shares in a company. I cannot see how owning shares in any company could constitute a contract of employment. As I said above, you need legal advice from an immigration lawyer who would have experience of these matters and put your mind at rest.