Ireland opens up to Abu Dhabi Fund Managers
The Irish Financial Regulator has recently completed its due diligence on the regulatory environment for asset managers located in Abu Dhabi. As a result of this successful review and the co-operation between the relevant regulators, the Financial Regulator has now confirmed that it will accept applications from firms based in Abu Dhabi for approval to act as the investment manager or promoter to Irish based funds. Such approval would enable an Abu Dhabi based firm both to establish new regulated funds, including UCITS, in Ireland, or to be appointed as investment manager to an existing Irish domiciled fund. This formalises the policy which has facilitated Abu Dhabi based managers, The National Investor and National Bank of Abu Dhabi to establish their Irish UCITS platforms earlier this year. It also coincides with the Financial Regulator’s entry into a memorandum of understanding (the “MOU”) with its counterpart in the UAE, the Emirates Securities and Commodities Authority (the“SCA”).
Memorandum of Understanding
The SCA and the Irish Financial Regulator entered into a MOU on 13 June 2010. The MOU provides a framework for boosting joint co-operation and sharing of information to enable the two regulators to discharge their duties effectively. Both regulators will also provide training and technical assistance to the other upon request and there are provisions for bilateral meetings to be held annually. A MOU was also entered into with the Dubai Financial Services Authority in July 2008.
Double Taxation Treaty
A double taxation treaty between Ireland and Abu Dhabi was signed on 1st July 2010 to further foster co-operation. Ireland now has a network of 59 tax treaties and is currently in the process of negotiating treaties with additional countries, including Kuwait and Saudi Arabia, to expand this network.
Funds domiciled in Ireland, an EU member state and full member of the OECD, currently hold over US$1 Trillion in assets, including over US$800 Billion in UCITS. Ireland has become a jurisdiction of choice over the past 20 years in which to domicile internationally distributed investment funds. Irish funds (both UCITS and non-UCITS) are now distributed in over 70 countries. This is primarily due to the provisions of its tax system, regulatory environment and expertise.
Irish investment funds are exempt from any Irish tax on income and gains derived from their investment portfolios irrespective of the investors’ tax residence.
Shari’ah Compliant Funds and Expertise
Ireland’s Financial Regulator has established a specialist unit responsible for the authorisation of Shari’ah investment funds. This ensures efficiency and consistency when processing the authorisation of such funds.
Funds may be established in Ireland under local legislation or established pursuant to European legislation as UCITS. UCITS funds can be marketed cross-border throughout Europe (and increasingly in areas such as the Middle East, the Far East and Latin America) without the need for full authorisation in the target countries.