The Irish Minister of Finance has approved, in principle, legislative proposals for a new form of corporate structure for funds, (the “Irish SICAV”).
A SICAV or “Societé d’Investissement á Capital Variable” is an open-ended collective investment scheme common in countries such as Luxembourg and Switzerland. It is an open-ended vehicle with variable capital equal to the net asset value of the Fund.
Investment funds in Ireland which use a corporate structure are incorporated as public limited companies (“plc”) under the Companies Acts. The new SICAV will be specifically designed for investment funds and therefore will not be subject to the rules of other forms of companies, thereby reducing the need for compliance with certain inappropriate requirements under the Companies Acts. The legislation will also increase the range of structures open to investment managers and promoters establishing funds in Ireland.
One of the main advantages of SICAV will be the ability of this structure to “check-the-box” for US tax purposes, which an Irish plc cannot do at present.
It is anticipated that the proposed legislation will be enacted by the end of 2012 prior to the entry into force of the Alternative Investment Funds Managers Directive (“AIFMD”) in July 2013.