The Irish Government published the long awaited Irish Collective Asset-management Vehicle Bill, 2014. The key driver behind the creation of ICAVs is to create a separate and distinct corporate fund regime that will simplify the creation and administration of investment funds in Ireland and overcome two particular difficulties faced by investment funds established as PLCs:

  • The ICAV structure has been specifically tailored to the requirements of investment funds which should result in ICAVs being able to avoid administrative costs associated with compliance with rules and regulations more appropriate to trading companies.
  • ICAVs will be able to elect their classification under the US “check-the-box” taxation rules. This would allow an ICAV to be treated as a partnership for US tax purposes, and so avoid certain adverse tax consequences for US taxable investors. This is in contrast to the status of the Irish PLC which is not able to check-the-box for US tax purposes giving rise to potential treatment as a Passive Foreign Investment Company (PFIC) for US investors which depending on the precise status of the investor and the elections it makes can give rise to a greater tax and administrative burden than if the fund is able to “check-the-box”. 

Please see our In Focus note on The ICAV Bill for more detail.