Ireland - information for setting up a fund

Ireland - information for setting up a fund

Download the special report Hedgeweek guide to setting up alternative investment funds 2009

Ireland

Fund legislation 

 UCITS: European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003
 Non-UCITS investment companies: Part XIII of the Companies Act, 1990
 Non-UCITS unit trust: Unit Trusts Act, 1990
 Investment Limited Partnerships (non-UCITS): Investment Limited Partnerships Act, 1994
 Non-UCITS common contractual funds: Investment Funds, Companies and Miscellaneous Provisions Act, 2005

Number of funds

 4,941 Irish regulated funds as of March, 2009 (source: Financial Regulator)
 5,749 non-Irish funds administered in Ireland as of March, 2009 (source: Irish Funds Industry Association)

Number of funds by category

All data as of March 2009 and includes sub-funds (source: Financial Regulator)

UCITS                                  3,054
Non-UCITS                         1,857
Retail Non-UCITS               526

Professional Investor           Non-UCITS 212

Qualifying Investor                Non-UCITS 1,119

There are no official statistics available on fund strategies

Domiciled and administered fund assets total:

As of March, 2009 there were 1,353,150,610,000 in total fund net assets administered in Ireland, comprising both Irish and non-Irish funds (source: IFIA).

Domiciled and administered fund assets by category:

There are no up-to-date official statistics available on fund strategies as such. The numbers of Irish registered funds by regulatory category are provided above.

Regulator

The Irish Financial Services Regulatory Authority (commonly known as the 'Financial Regulator'). The Financial Regulator is a constituent part of the Central Bank and Financial Services Authority of Ireland, formerly knows as the Central Bank.

Address: Irish Financial Services Regulatory Authority, Financial Institutions and Funds Authorisation, PO Box 9138, College Green, Dublin 2, Ireland

Service providers

There are a large number of law-firms which provide legal services to the alternative investment funds industry here, both the leading commercial firms and smaller niche practices.

All of the main accountancy firms have large operations here.

There are approximately 50 fund administrators active in Ireland, many of which have affiliated custodian operations in Ireland, the majority of which would have alternative investment fund servicing capabilities.

There are no available statistics on Irish corporate service providers as generally these entities may not be required to be regulated in Ireland. Generally, fund administrators or specialised transfer agency companies would provide those services normally provided by corporate services provides, excluding company secretarial services which are also provided by corporate secretarial affiliates of the law-firms or certain independent firms.
Investment banks involved in prime brokerage do not typically provide this service out of Ireland and it is more commonly associated with other financial centres such as London and New York.

There are no official statistics on the number of placement agents in Ireland.

Local stock exchange: 

The Irish Stock Exchange Limited

Local fund industry body: 

Irish Funds Industry Association

Promotion agency for funds/financial sector: 

Industrial Development Agency and Irish Funds Industry Association

Double taxation treaties 

Ireland has forty six tax agreements, which provide for the elimination or mitigation of double taxation with the following countries: Australia, Austria, Belgium, Bulgaria, Canada, Chile, China, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Israel, Italy, Japan, Republic of Korea, Latvia, Lithuania, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Romania, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, the United Kingdom, the United States of America, Vietnam and Zambia. 

In addition Ireland has treaties with Macedonia and Malta which are both due to come into effect from 1st January 2010. Ireland also has treaties with both Turkey and Georgia which do not yet have effect.
Forty five out these tax treaties have exchange of information clauses that are based on the OECD Model Treaty. Switzerland is the only country without such a clause.

Tax information exchange agreements 

Ireland has a tax information exchange agreement and agreement for affording relief from double taxation with the Isle of Man. There is one in negotiation with Jersey.

Under the European Savings Directive, all European Member States and a number of dependant territories are required to exchange certain information and/or impose a withholding tax on particular types of payments made to certain individuals. Andorra, Liechtenstein, Monaco, San Marino and Switzerland are not participating in automatic exchange of information but are exchanging information on a request basis.  Their participation is confined to imposing a withholding tax. The other dependant territories that are participating are Anguilla, Aruba, British Virgin Islands, Cayman Island, Guernsey, Isle of Man, Jersey, Montserrat, Netherlands Antilles and Turks and Caicos Islands.

Alternative fund, manager and service provider information

Types of alternative fund vehicle

 Open-ended or closed-ended investment company with fixed or variable capital
 Open-ended or closed-ended unit trust
 Open-ended or closed-ended common contractual funds
 Open-ended or closed-ended investment limited partnerships

Each of the above may be established as single or multi-portfolio funds. Investment companies and common contractual fund sub-funds have statutory ring-fencing. Each of the above may be established as single or multi-class funds.

Available types of corporate vehicle:

 Single portfolio company
 Segregated portfolio company (umbrella)
 Variable or fixed capital company
Types of regulatory fund category
 UCITS (no minimum initial subscription requirement);
 Retail Non-UCITS (no minimum initial subscription requirement except for private equity funds, in respect of which it is 12,500);
 Professional Investor Non-UCITS (minimum initial subscription of 125,000);
 Qualifying Investor Non-UCITS (minimum initial subscription of 250,000, investor wealth tests and risk acknowledgement);
The following additional fund categories are not widely used either due to their tax status (non-designated funds) or the narrow investor requirements (collective investor funds);
 Non-designated funds (no minimum subscription requirement; only available as variable capital investment companies and may not be sold to the public; these are private investment fund vehicles and are subject to Irish corporation tax at a rate of 10%/12.5% on income/capital gains);
 Collective investor funds (available to life assurance companies, pension funds and other collective investors; tax exempt, does not have to be sold publicly).

Audit requirement 

Yes, annual, local

Financial statement requirements 

Yes, all semi-annual unaudited and annual audited. Corporate Qualifying Investor Funds do not have to prepare semi-annual unaudited accounts.

Cost of regulatory fees

2,200 per year for each fund plus 550 per sub-fund up to a maximum of 4,950. This is reviewed on an annual basis by the Irish Regulator.

Overall cost of fund establishment

Legal costs will vary from law-firm to law-firm and depending on the type of fund and other factors. There is no up-front regulatory fee. There is a small government levy for incorporating corporate funds and other initial statutory filings.

Regulatory approval time

Qualifying Investor Funds: 24 hours following filing of prospectus, constitutive document, principal service agreements, application request, completed regulatory application forms and various confirmations assuming promoter, investment manager, administrator, custodian and directors have already been approved by the Regulator and the application is within normal prescribed parameters and any derogation requests have been obtained in advance.

Professional Investor Non-UCITS: if promoter approval is required, this must be obtained generally before the fund application is submitted to the Regulator. The promoter approval will generally take between one and two weeks. Once promoter approval is obtained, and the fund application is submitted, the Regulator endeavours to respond to the initial application within two weeks and subsequent responses from the fund each time within one week. Normally, two to three sets of comments can be expected, depending on the nature of the fund, resulting in the application spending around four weeks in total with the Regulator.

Retail Non-UCITS: Similar to Professional Investor Fund above.

UCITS: Similar to Retail Non-UCITS, but in addition, self-managed UCITS and UCITS common contractual fund and unit trust management companies must be approved as part of the process of seeking regulatory approval for the UCITS, which generally can result in the addition of two to four weeks to the overall timing.

Overall establishment time

In each case from a standing start (i.e. fund promoter, investment manager and directors have not been previously approved by the Irish regulator, but fund service providers have been chosen) to fund authorisation.
UCITS tends to take approximately 3 months

Non-UCITS

Retail approximately 2 months
Professional Investor Funds approximately 2 months
Qualifying Investor Funds 1 month

Further reading


Download the special report Hedgeweek guide to setting up alternative investment funds 2009


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