On 20 December 2013 the Irish Minister for Finance published the General Scheme of the Irish Collective Asset-management Vehicle (ICAV) Bill (the “ICAV Bill”).

The publication of the General Scheme of the ICAV Bill is widely regarded as a positive development for the Irish funds industry and it follows significant contribution from the industry over the past few years.

The ICAV Bill will facilitate a new form of Irish corporate investment vehicle allowing managers and promoters to avail of a structure that is designed specifically for investment funds and which is not subject to rules or requirements designed for other forms of company (thereby helping to reduce administrative burden and costs).

One of the primary objectives of the ICAV Bill is to permit the creation of an Irish authorised corporate fund that could,  under US tax rules, make an election (ie ‘check the box’) to be treated as a flow- through or partnership for US tax purposes. Currently, Irish authorised unit trusts and investment limited partnerships can be treated as a flow-through or partnership for US tax purposes. However, where an Irish authorised fund is constituted as a public limited company it is a ‘per se’ corporation for US tax purposes and therefore cannot

be treated as a flow-through or partnership. The proposed new Irish authorised corporate fund is, however, designed to be treated as a flow-through or partnership for US tax purposes.

The ICAV Bill will also permit a conversion of an existing Irish corporate fund to an ICAV. The Minister for Finance has commented:

This is a significant milestone in delivering a new corporate vehicle for investment funds which will be more suited to the needs of the global funds industry.The ICAV will help the Irish funds industry to compete for new sources of business. I intend to push ahead with the drafting of the Bill as a matter of priority”.

The publication of the General Scheme of the ICAV Bill highlights the Government’s commitment to the Irish funds industry and serves to enhance the attractiveness of Ireland as a domicile for collective investment schemes. It is anticipated that the proposed legislation will be implemented in early 2014.