Foreign investors are advised to invest on the Irish market as it provides some of the best conditions. The taxation system, alongside with a solid legislative system and governmental incentives represent major assets of the Irish economy. A way to establish a business presence on the Irish market is by setting up an investment fund. Our team of Irish solicitors can provide assistance for the incorporation of this type of entity, and they can also offer an in-depth presentation on the investment market in Ireland.
Types of investment funds in Ireland
Investment funds in Ireland are set up under two main legal structures. One refers to the Undertakings for Collective Investment in Transferable Securities (UCITS) and the other structure refers to the Alternative Investment Funds (also referred to as non-UCITS).
The UCITS were introduced in 1985 on the European market, under a directive of the European Union (EU) which was trying to create a single market for the investment schemes within the EU area.
A UCITS can be established under a single fund structure or under an umbrella structure, which means that the investors are allowed to set up several sub-funds within the main fund. The main advantage of establishing sub-funds is that they can carry out different investment strategies and different business objectives.
Irish UCITS can be set up under the following:
• Exchange Traded Funds (ETF) – the structure was introduced in 2000 and it is important to know that 50% of the European ETFs assets are established in Ireland;
• Money Market Funds – Ireland is the top destination of the funds set up under this structure.
Alternative investment funds (AIF) are regulated by the Alternative Investment Fund Manager Directive (AIFMD), issued in 2013. The first legal framework for AIF available in the EUwas first introduced by Ireland, which, later on, introduced in its legislation the AIFMD; our team of Irish lawyers can offer more details in this sense.
Regulatory framework for Irish funds
The main institution regulating the activity of the Irish funds is the Central Bank of Ireland, the body which provides authorization to such entities.
Irish UCITS are regulated by two main laws provided by the EU and local government:
• SI 352 of 2011 – European Communities UCITS Regulations 2011;
• SI No. 420 – Central Bank Act 2013, which was amended in 2015.
Investors who need to receive further information on the investment funds in Ireland can contact our Irish law firm for more details on the local legislation.