Jason Bibb from Apex Fund Services provides a brief guide to establishing an investment fund in Ireland.

19 July 2010

Jason Bibb, Global Head of Business Development, Apex Fund Services Holdings Ltd. provides a brief guide to establishing an investment fund in Ireland.

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In the current environment, amidst the implementation of AIFM Directive ("AIFMD") and post Madoff, many new and existing funds are looking for a regulated domicile which is internationally respected, with the appropriate service and tax infrastructure to support investment funds. More importantly, as a result of AIFMD, investment managers are looking to certain jurisdictions that have investment funds that facilitate global distribution to establish their new products.

Ireland offers the infrastructure, regulation and the service provider excellence expected of a premium jurisdiction to establish a new investment product.  There has been a significant development in the funds industry in Ireland recently.  The Irish legal framework in relation to migration of funds has been amended. Legislation has been finalised which facilitates investment funds re-domiciling to Ireland in a simple procedure.  This has resulted in Ucits funds featuring prominently on the desired product list for hedge fund managers and Ucits has become a powerful international brand throughout Europe, and the rest of the world.

Owning and operating a successful investment fund can be both personally and financially rewarding.  However, launching an investment fund can be challenging and sometimes an overwhelming experience.  How should you structure your business? What service providers do you need?  What do you need to do first?  Below is a step by step guide to establishing an investment fund and make the appropriate introductions as required.

 

Language

English

 

Local Stock Exchange

Irish Stock Exchange

 

Local Service Provider Required?

Custodian; Administrator

Types of Vehicles

Funds are categorised as either UCITS or non-UCITS; UCITS being highly regulated vehicles under a European Directive that may be sold cross border into Europe with all other funds being non-UCITS.

 

Funds established in Ireland can be structured as Single or umbrella funds; Single or multi-class; Open-ended; limited liquidity or closed-ended; with strategies from plain vanilla to aggressive alternatives.

 

Variable Capital Company (VCC)

Fixed Capital Investment Company

Investment Limited Partnership (ILP)

Unit Trust

Undertakings for Collective Investment in Transferable Securities (UCIT)

 

Product Structures

UCITS

Equity Funds

Bond Funds

Money Market Funds

Multi Manager Funds

Common Contractual Funds

Index Funds

ETFs

Fund of Funds

REITS Funds

Securitized Assets

'130/30' Funds

 

Non-UCITS

Alternative Investment

Funds

Property Funds

Private Equity Funds

Fund of Funds

Fund of Hedge Funds

Feeder Funds

Venture Capital Funds

Set-up Costs

ISX Document Vetting fees

Prospectus: €8,000

Supplemental prospectus: €750

 

EU Funds:

Listing fees: €1,900 per application

Subsequent applications: €900

 

Non-EU Funds

€1,980 per application

Subsequent applications: €940

 

 

Investment Restrictions

Reduced for professional investor funds (PIFs)

Disapplied for qualified investment funds (QIFs)

 

Share Capital

Management/Administration companies (or Investment Companies with no management/administration): €125,000 minimum

ILP: €125,000 minimum

 

Minimum Investment

Retail fund: a fund which may be offered to the public and which permits subscriptions at any level.

Professional investor fund (PIF): a fund with a minimum subscription of €125,000.

Qualifying Investor fund (QIF): a fund with a minimum subscription of €250,000 and a qualifying investor test.

 

Directors Meetings

Investment Companies: regular, whether held inside or outside Ireland

 

Shareholder Meetings

Investment Companies: must be held in Ireland at intervals of no more than 15 months

 

Accounts

Annual audited accounts and half yearly reports sent to investors.  If Irish domiciled, must be supplied to IFSRA

 

ILP must submit monthly accounts to IFSRA

 

Annual Fees

EU Funds

1-5 sub funds: €1,900

6-10 sub funds: €1,150

11+ sub funds: €760

 

Non-EU Funds

1-5 sub funds: €1,980

6-10 sub funds: €1,200

11+ sub funds: €800

 

Registration Fees

Stand Alone Fund:€1,750

1 sub fund: €2,300

2 sub fund: €2,850

3 sub fund: €3,400

4 sub fund: €3,950

5 sub fund: €4,500

5+ sub fund: €4,500

Confidentiality

Qualified duty of disclosure

 

OECD Membership

Permanent representative

 

Anti-money Laundering

EU Money Laundering Directive implemented

 

Tax

A fund that is authorised/domiciled in Ireland is not subject to Irish tax. Non Irish resident investors that have completed a non Irish residency declaration on acquiring units in the fund will receive dividend payments or redemptions/sales without deduction of any withholding tax. (Payments to Irish resident/ordinarily resident investors in the fund will be subject to a 20 p.c. withholding tax on annual dividends and a 23 p.c. withholding on any gains on redemption, sale or transfer of units.)

 

Set-up Time

Approximately 8 weeks.  See below:

Fund accounting workflow

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