In November independent figures from the European Fund and Asset Management Association (EFAMA), reported by the Irish Funds Industry Association (IFIA), indicated that Ireland secured 45 per cent of the total European UCITS market for the first half of 2012. In 2011 Ireland attracted some €60 billion in new UCITS monies and according to the IFIA the latest figures from EFAMA show that Ireland is on track to improve on that further in 2012.
In our Spring Tax Alert we indicated that the Minister for Finance had in principle approved the development of legislative proposals (the SICAV legislation) for a new corporate structure. In October the Government published a list of Bills in respect of which heads have yet to be approved, which included the Proposed Open Ended Investment Company (SICAV) Bill with the stated purpose of providing a bespoke corporate structure for collective investment schemes (funds) in accordance with the commitment set out in the IFSC Strategy.
The advantage of the proposed SICAV will be to provide a corporate entity that, unlike an Irish public limited company, can elect to be treated as ‘look through’ under US "check the box" rules thereby avoiding onerous US passive foreign investment company rules. At present if a US investor needs the fund entity to be able to "check the box" an Irish corporate fund cannot be used although an Irish unit trust, common contractual fund or investment limited partnership can. With the Alternative Investment Fund Managers Directive coming into effect in July 2013 the government is aiming to enact legislation by the first quarter of next year. This development should increase business opportunities by increasing the range of structures available to promoters seeking to establish investment funds in Ireland and should further feed into the development of the Irish funds industry and Ireland as the domicile of choice in the coming year.