Intercompany Revolving Loan Agreement Template for Ireland

An Intercompany Revolving Loan Agreement is a specialized financial document that allows related companies within a corporate group to establish flexible lending arrangements under Irish law. This agreement creates a revolving credit facility where funds can be borrowed, repaid, and re-borrowed multiple times within agreed limits, providing essential liquidity management for group companies operating in Ireland.

When do you need this document?

You'll require this agreement when establishing internal financing between parent companies and subsidiaries, or between sister companies within the same corporate group. It's particularly crucial when your Irish subsidiary needs working capital support from its parent company, or when you're implementing a centralized treasury function across your group operations. The document becomes essential during periods of seasonal cash flow variations, expansion projects requiring interim funding, or when optimizing tax efficiency through strategic intercompany lending arrangements.

Key legal considerations

The agreement must carefully address several critical legal aspects to ensure enforceability and compliance. Interest rates must be set at arm's length to satisfy transfer pricing requirements under Irish tax law, preventing challenges from Revenue authorities. The facility terms should include clear drawdown procedures, repayment schedules, and default provisions that protect both lender and borrower interests. Corporate benefit provisions are essential to demonstrate that the arrangement serves legitimate business purposes rather than constituting illegal financial assistance. You must also incorporate appropriate security arrangements and guarantee structures that comply with Companies Act 2014 requirements, ensuring directors fulfill their fiduciary duties when approving the arrangement.

Legal requirements in Ireland

Under the Companies Act 2014, intercompany loans must satisfy specific corporate benefit tests and may require shareholder approval in certain circumstances, particularly for private companies. The agreement must comply with Central Bank Act 1997 provisions if either party is a regulated entity, and incorporate Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 requirements for transaction monitoring. Interest calculations must align with the Interest Act 1933 to avoid usury concerns, while payment terms should reflect European Communities (Late Payment in Commercial Transactions) Regulations 2012 standards. Tax considerations under the Taxes Consolidation Act 1997 require careful documentation of arm's length pricing, withholding tax obligations, and transfer pricing compliance to prevent Revenue challenges and ensure optimal tax treatment for both parties.