Ireland presents an advantageous platform for structuring and distributing investment funds, underpinned by EU passporting rights and a supportive fiscal and regulatory regime.
Key factors underscoring Ireland’s appeal for fund promotion include:
- European Union membership, enabling UCITS and AIF access across the EU
- A robust regulatory system promoting investor protections whilst facilitating market growth
- A competitive 12.5% corporation tax rate
- An expanding 72-country tax treaty network
Ireland's regulation is grounded in EU law, with funds supervised by the national CBI per its regulatory codes. Investment vehicles may exist under the Undertakings for Collective Investment in Transferable Securities or Alternative Investment Funds frameworks.
UCITS Classes
UCITS comprise open-ended funds eligible to invest in liquid assets beyond traditional securities. Two primary UCITS structures exist here: single and umbrella fund with segregated sub-funds as separate entities.
Subject to certain criteria, the Central Bank may authorise 100% allocation of a UCITS’ net asset value into government and public body securities.
A key UCITS advantage is securing EU marketing passport rights, enabling free distribution across the EU once authorised without individual registration.
Multiple Share Classes
In addition to sub-funds, multiple classes of shares with different terms and conditions can be created within an umbrella scheme without assets being maintained separately for each class.
Other UCITS structures include Exchange-Traded Funds and Money Market Funds.
The nation hosts circa 50% of EU ETF assets. MMFs invest in liquid short-run investments that can have a fixed or variable net asset value.
In summary, this European country provides an optimal, flexible domicile for registering and distributing various UCITS models.
Acquiring an AIF Manager’s Licence
Ireland's Alternative Investment Fund Managers Directive regulates AIFs, outlining organisational and operational requirements for managers.
Two AIF options exist:
Qualifying Investor AIFs (QIAIFs)
QIAIFs afford investment flexibility for qualifying investors including:
- No investment restrictions or borrowing/leverage limits
- Risk diversification waived for investment companies
- Favourable tax treatment, with QIAIFs exempt from Irish tax on income and non-resident distributions
QIAIFs can invest via Special Purpose Vehicles (SPVs) subject to 25% profit taxation in Ireland, whilst the QIAIF avoids tax on SPV-derived interest/dividends.
QIAIFs can readily engage in short selling, securities lending, derivatives trading, and other hedge fund strategies.
Retail Investor AIFs (RIAIFs)
RIAIF regulation exceeds QIAIFs but with fewer investment restrictions. Only fully authorised AIF Managers can operate Irish RIAIFs permitted over 30% investment in other funds.
Irish Stock Exchange Listing
A stock exchange listing assists marketing to institutional investors with exchange investment requirements. The Exchange offers an internationally recognised platform with comprehensive listing rules. Streamlined admission is possible for open-ended funds meeting certain criteria.
Appointing an experienced listing sponsor is mandatory to assess suitability, navigate admission, and maintain ongoing compliance.
Tax Treatment
Funds authorised by the Central Bank for Irish distribution are exempt from taxes regardless of investor residence. Similarly, fund share dealings occur free from Irish stamp duty and capital acquisition taxes.
2019 legislative enhancements bolstered Ireland's private equity and venture capital appeal.
In summary, the country furnishes a supportive, transparent funds jurisdiction to access global investment markets. Specialist counsel can advise on optimally harnessing Ireland’s UCITS and AIF frameworks.
Please note that this material is not intended to answer questions about any investment. Contact our specialists to clarify your questions.
