Right place
right time
Ireland - the
domicile of choice
for regulated funds
www.pwc.com/ie
January 2012
Download QR code
scanner for your
smart phone to
view what is behind
the code.
2 Right time, right place 2012
2012 Right time right place 3
1. Foreword 04
2. The Irish Funds Industry 05
3. Regulation 10
4. Distribution of Irish funds 25
5. Listing on the Irish Stock Exchange 34
6. Taxation 39
7. P ro ducts 43
8. Services 51
9. Contacts 54
10. Appendices 57
Contents
4 Right time, right place 2012
Foreword
This achievement underlines the
experience, expertise and global reach of
Ireland as a leading funds domicile and as
a leading centre for the administration of

landscape. It is now UCITS IV ready with
the Central Bank transposing this
legislation by the 1 July 2011 deadline and
the QIF product is also ‘AIFMD ready’.
The Irish funds industry has proven itself
to be strong, diverse and resilient. It has
emerged relatively unscathed from the
global fi nancial crisis. According to the
Central Bank of Ireland, as of the end of
November 2011, the assets of Irish
domiciled investment funds were EUR 1
trillion, the industry entered 2012 as a
trillion euro industry, a remarkable
achievement. Ireland was the managers’
choice for both UCITS and alternatives
investments in 2011. Recent fi gures from
the Central Bank of Ireland show that the
number of QIFs, the alternative fund
vehicle, is at an all time high of 1,355
funds with assets also reaching a peak of
EUR174 billion. QIF assets grew some 18%
in 2011. On the UCITS side, EFAMA
statistics showed that Ireland attracted the
highest infl ow of UCITS net assets (EUR
41.5 billion) of any domicile for 2011. In
fact, the statistics show that the gains
made by Ireland were almost two and half
times that of the next most successful
domicile.
Damian Neylin

assets are serviced in Ireland
• 7.4% of global hedge funds
are domiciled in Ireland
• Ireland is home to 63% of
all European hedge funds
• 18% growth in the
Qualifying Investor Fund
(“QIF”), the vehicle of choice
for fund promoters wishing
to pursue alternative
strategies such as hedge
funds, in 2011
• 1,355 QIFS now authorised
with AUM of EUR 174 bn
• The QIF is “AIFMD ready” as
it already complies with the
majority of the requirements
Why Ireland for UCITS?
• Almost 80% of the assets
in all Irish domiciled funds
are UCITS
• Approximately 3,000 Irish UCITS
funds approved for cross border
distribution
• Irish UCITS are distributed
in over 70 countries
• Ireland is the fastest growing major
cross border UCITS domicile – over
the past ten years the net assets of
Irish UCITS have grown by 422%

70 countries in Europe, Asia,
the Middle East and the Americas
Source - Irish Funds Industry Information
2012 Right time right place 7
Promoters from countries all over the
world have set up funds in Ireland
Who is here already?
20 largest promoters in Ireland
1. Blackrock
2. PIMCO
2. Goldman Sachs
4. HSBC
5. State Street
6. Insight Investment
7. D rey f us Cor po ra ti on
8. Deutsche Bank/DWS
9. Vanguard Group
10. Russell Investments
11. Scottish Widows
12. Mediolanum
13. Royal Bank of Scotland
14. Ignis Asset Management
15. Legg Mason Group
16. Baring Asset Management
17. Northern Trust
18. Invesco
19. Aviva
20. Legal & General
Source: Lipper Fund Encyclopaedia Ireland 2011-2012
Country of

BVI 5 1,333,554,879
Finland 4 1,192,292,821
Kuwait 2 1,179,162,058
Israel 2 627,935,711
Guernsey 2 384,518,723
Russia 4 305,911,563
India 2 280,964,812
Jersey 2 274,481,942
Egypt 1 272,269,927
Portugal 2 261,211,824
Czech 1 216,476,470
Bahrain 1 207,831,875
Saudi Arabia 2 186,363,682
Greece 3 108,476,013
Cayman 2 106,681,287
Country of
origin
No of
funds
Assets
Barbados 1 105,609,403
Austria 4 103,333,467
Honduras 1 98,745,690
UAE 6 85,562,418
Sri Lanka 1 38,508,262
Bermuda 2 34,851,888
Botswana 1 34,720,296
Korea 1 23,707,649
China 1 23,215,255
Ukraine 1 21,442,001

43% HFM week survey
& IFIA, Oct 2010
European hedge funds
domiciled in Ireland
63% HFR, Oct 2010
European ETFs
domiciled in Ireland
31% Dec 2010
Promoters originating
from the US
43% June 2011
Promoters originating
from the UK
38% June 2011
European cross
border market
30% Lipper FMI, 2010
2012 Right time right place 9
• At the end of 2011, assets of Irish
domiciled investment funds had reached
EUR 1 trillion.
• Ireland was the managers’ choice for
both UCITS and alternatives
investments in 2011.
• Recent fi gures from the Central Bank of
Ireland show that the number of QIFs,
the alternative fund vehicle, is at an all
time high of 1,355 funds with assets also
reaching a peak of EUR174 billion. QIF
assets have grown some 18% in the past

•
Irish GDP falls
3.5%
•
Funds assets fall
globally by 27.5%
in 2008
•
Net assets of Irish
domiciled funds
fall by 20% in
2008
•
Irish GDP falls
7.6%
•
16% annual
growth in Irish
domiciled funds
•
Funds assets
serviced in
Ireland reach
EUR 1.8 trillion all
time high
•
National Asset
Management
Agency set up to
manage bad

Sept 2008 Dec 2008 Dec 2009 Nov 2010 Dec 2011May/June 2009
Irish funds industry fared well during challenging economic times
•
Irish GDP growth
average at 0.7%
for year
Source: Irish Funds Industry Association (IFIA), PwC Analysis
10 Right time, right place 2012
Regulation
2012 Right time right place 11
Overview of the Irish funds industry environment
Service Providers
No of
international
administrators
46.
No of
custodians
18.
No of law fi rms 11.
Stock Exchange
Name Irish Stock Exchange.
No of funds
listed
Over 3,000 funds and sub-funds.
Tax
Tax environment
- what taxes are
applicable at
fund level?

Switzerland, Taiwan, UAE and USA.
In addition to the above bilateral
Memoranda of Understanding there are
also a number of multilateral agreements
in place, having been signed into effect on
various dates from March 1996 to date.
Is the Saving
Directive
applicable in
your domicile?
Yes. No With Holding Tax (WHT) on
investor payments. Ireland has fully
implemented the EU Savings Directive.
Tax (continued)
Is stamp duty
applicable in
your domicile?
No stamp duty or capital duty is payable
on issue, transfer, repurchase or
redemption of units in a fund.
VAT treatment-
What is the VAT
treatment for
funds?
•
Fund activities VAT exempt.
•
Funds must self account for VAT on
reverse charge services received.
•

•
Qualifying Investor Funds (QIF).
•
Closed-ended Funds.
Average set
up time per
structure
(UCITS, QIF etc)
UCITS – 4-6 Weeks
Overall establishment including approval
of service providers – 3 months.
Non - UCITS
Qualifying Investor Fund (QIF) – 24 hours.
Overall establishment including approval
of service providers – 4-6 weeks.
Professional Investor Fund (PIF) – 4 weeks.
Overall establishment including approval
of service providers – 6-8 weeks.
Retail Non –UCITS - 4 weeks.
Overall establishment including approval
of service providers – 6-8 weeks.
Overview of the Irish funds
industry environment
12 Right time, right place 2012
Regulation (continued)
What are
the basic
documents
required for
setting up a

•
Partnership Agreement (Investment
Limited Partnership).
•
Management Agreement (Optional for
Investment Company).
•
Investment Advisory Agreement (All legal
structures).
•
Administration Agreement (All legal
structures).
•
Transfer Agency Agreement (All legal
structures).
•
Distribution Agreement (If applicable).
•
Paying Agent/Facilities Agent Agreement
(If applicable).
•
Prime Brokerage Agreement (If applicable).
Is promoter
approval
required?
Yes.
What are
the capital
requirements
for a fund

of ownership of assets to the newly
incorporated fund or cause any tax charge
to the fund or underlying investors for
doing so.
Outline the Risk
Management
Process for
funds in your
jurisdiction
•
Irish risk management process is based
on the Central Bank’s guidance notes
with fl exibility.
•
Risk monitoring for non-sophisticated
funds in Ireland is on a daily basis.
•
Risk management process is not
the responsibility of any designated
individual. Collectively the responsibility
of the board of the management
company.
What is the level
of supervision
required over
a custodian
in your
jurisdiction?
Custodian has a duty of care to the unit
holders and is liable for any failure to meet

•
Must be authorised by a supervisory authority to ensure
the protection of unit holders which provides a similar
level of investor protection to that provided in Ireland.
•
Must make application to the Central Bank in writing,
enclosing the information and documentation as outlined
by the Central Bank.
•
Must comply with the provisions of the Code of
Advertising Standards for Ireland.
The Central Bank is the competent
authority for the authorisation of regulated
funds in Ireland. Their duties include:
• Approval of the fund promoter,
investment manager and Management
Company.
• Approval for the marketing of non-Irish
investment funds into Ireland.
• Specifi cation and approval of the fund
administrator and custodian.
• Specifi cation and approval of the prime
broker in the case of hedge funds.
• Authorisation and ongoing supervision
of Irish funds.
The regulatory authority in Ireland has
continuously adopted an “open door”
policy in their willingness to meet with
project promoters and discuss issues
directly with them. The Central Bank of

the fund liaising with the Central
Bank throughout the course of the
authorisation process.
To obtain promoter approval, a promoter
must submit a standard application
providing details of:
•
The type of funds it intends to promote.
•
Shareholders holding 10% or more
(whether directly or indirectly) of the
capital or voting rights of the promoter.
•
Background description of the
applicant.
•
The value of assets under management
and the number of clients.
•
Latest audited fi nancial statements.
•
Regulatory status in applicant’s domicile
country.
•
The proposed service providers.
•
Proposed distribution network for retail
funds only.
•
Proposed intention of promoter to act

approval for the fund documentation.
An application for authorisation of an
investment fund is made by lodging
fund documentation, in draft form, with
the Central Bank. The Central Bank will
usually respond with its initial comments
within three to four weeks of receipt of
application. Depending on its nature
and complexity, a typical fund should be
capable of authorisation within a four to
six week period upon submission of all
documentation. The exception to this
is the QIF which avails of a one day fast
track authorisation process.
To obtain approval an investment fund
must submit a standard application to the
Central Bank comprising of the following
information:
•
Details of the custodian/trustee and
Management Company (if applicable)
and administration company (if
applicable).
•
Details of the proposed directors of
the fund (if an investment company,
including their curriculum vitae).
•
Details of the investment manager,
advisor, distributor or placing agent of

located in another jurisdiction.
Irish UCITS Management Companies and
Self-Managed UCITS must comply with
the Central Bank’s UCITS notices and
guidance note in relation to the
Management Company, see below:
• UCITS 2, 10 & 16 of the UCITS notices.
• Guidance note - organisation
of Management Companies.
• Non UCITS Management Companies are
subject to the Central Bank’s non-UCITS
notices.
These documents are available on the
Central Bank website.
2012 Right time right place 15
Directors
The directors and managers of the fund
are required to meet certain standards of
competence and probity which requires
them to submit a detailed questionnaire to
the Central Bank seeking approval for that
appointment. The Central Bank must
satisfy itself as to the reputation and
experience of all directors by applying its
Fitness and Probity test. This is to ensure
that the Directors and Managers have the
proper skills to manage a fi rm. “Fitness”
requires that a person appointed as a
Director or Manager has the necessary
qualifi cations, skills and experience to

The IFIA recently release the “Corporate
Governance Code; Collective Investment
Schemes and Management Companies”
and a questions and answers paper (FAQ’s)
to compliment the Code and support its
introduction. While the Code is a
voluntary industry code its adoption is
strongly recommended and it will be
effective from the 1 January 2012 with a
transitional period of 12 months till the 1st
January 2013.
The preparation of the Code followed an
invitation from the Central Bank to the
industry, through the IFIA, to develop a
voluntary Corporate Governance Code for
the funds industry in Ireland. Following
considerable engagement with and input
from the Central Bank a draft code was
prepared and earlier in the year circulated
for consultation. During the consultation
process a signifi cant amount of feedback
was received, this feedback was discussed
with the Central Bank following which the
now fi nalised Code was agreed. The Code
and the FAQ’s are available from:
www.irishfunds.ie
Administrator / Trustee / Custodian
All Irish investment funds must have an
Irish based administrator and an Irish
based custodian / trustee. The

The main service providers to an Irish fund
are its administrator, custodian and
investment manager. The investment
manager can be based outside of Ireland
but it is a requirement from the Central
Bank that the administrator and the
custodian must be based in Ireland.
The Irish custodian model as required by
the Central Bank provides signifi cant
comfort to investors as they specifi cally
require the custodian to act in the interests
of the unit holders in the funds. The
custodian will be directly liable to the unit
holders for any unjustifi able failure to
perform its obligations or improper
performance of them. Such duties will also
extend to the custodian’s appointment of
any sub-custodians, which is of particular
importance to investors where assets are
likely to be held in various jurisdictions
outside Ireland.
There are two main fund regimes in
Ireland; UCITS and non-UCITS. There are
a number of factors to take into
consideration when deciding whether to
structure an investment fund under either
the UCITS or the non-UCITS regime such
as; location of target investors, investment
policy of the fund etc.
The non-UCITS regime is more suitable to

thereby furthering the EU’s goal of a single
market for fi nancial services in Europe.
This is commonly referred to as a
“European Passport” and is available only
to funds under the UCITS regime. Once a
UCITS fund is approved in one EU country,
application may be made to have the fund
registered for marketing to the public in
any other EU country.
Furthermore the success of the UCITS
brand has now transcended beyond the
borders of the EU and the UCITS regime is
now recognised globally as a well
regulated investment product. 358 fund
promoters from over 50 countries have set
up Irish domiciled funds which are
distributed to over 70 countries across
Europe, Asia, the Americas, the Middle
East and Africa.
2012 Right time right place 17
UCITS QIF
Defi nition UCITS are Undertakings for Collective Investment
in Transferable Securities. Having their origin in
European legislation, UCITS benefi t from an EU-
wide “passport” which means that once they are
authorised in one EU member state, they can be sold
in any other EU member state without the need for
additional authorisation. Due to of the necessity to
comply with a common European standard, UCITS
are now regarded globally as very well regulated

UCITS funds are sold to the public but also to
corporate and institutions. As UCITS funds may be
easily marketed across the EU and beyond, investors
originate from many parts of the world.
In order to qualify as a QIF, the fund may only accept
investors who satisfy certain eligibility criteria (“Qualifying
Investors”) and who subscribe a minimum of EUR
100,000 into the fund. Investors will need to be either
MiFID professional investors or certify that they have the
knowledge and experience necessary to understand the
investment in the fund.
Eligible
investments
While UCITS funds must invest in accordance with
the investment and borrowing restrictions imposed
by UCITS legislation, advances in the UCITS product
have broadened the range of assets into which
UCITS can invest. In summary, UCITS are permitted,
subject to certain criteria, to invest in:
•
Transferable securities;
•
Money market instruments;
•
Other open ended funds;
•
Closed ended funds;
•
Cash deposits with credit institutions;
•

to 80% of the UCITS net assets.
•
The limit of 10% above is further raised to 35% if the
securities or instruments are issued or guaranteed
by a government or its local authorities or by a
public international body.
•
A UCITS can invest up to 10% of its net assets in
unlisted transferable securities and money market
instruments.
•
A UCITS can invest up to 20% of its net assets in
any one CIS. Investment in non-UCITS CIS may not,
in aggregate, exceed 30% of net assets.
•
A UCITS can invest up to 20% of its net assets in
deposits made with the same credit institution. This
limit is raised to 20% for deposits made with the
fund’s custodian.
•
The risk exposure of a UCITS to a counterparty to
an OTC derivative may not exceed 5% of net asset
value. This limit is raised to 10% in the case of credit
institutions in the EEA or other specifi ed countries.
•
A combination of two or more of the following
issued by, or made or undertaken with, the same
body may not exceed 20% of the net asset value of
a UCITS:
- investments in transferable securities or money

QIFs established as fund of funds may invest up to
100% in unregulated schemes subject to a maximum
of 50% in any one unregulated scheme.
•
The Central Bank does not impose risk diversifi cation
requirements. It is the responsibility of the directors
of the investment company to ensure that the QIF
complies with the legislative requirement.
•
Debt securities - A QIF may not raise capital from the
public through the issue of debt securities. However,
the Central Bank does not object to the issue of
notes by authorised collective investment schemes,
on a private basis, to a lending institution to facilitate
fi nancing arrangements. Details of the note issue
should be clearly provided in the prospectus.
2012 Right time right place 19
UCITS QIF
Authorisation UCITS – 4-6 Weeks
Overall establishment including approval of service
providers - 3 months.
All the below parties must be approved /cleared by
the Central Bank;
•
promoter;
•
management company
(in the case of a Unit Trust and CCF);
•
trustee / custodian; and

the QIF will be authorised the following day.
Required
service
providers
•
Irish based custodian/trustee.
•
Irish regulated external auditor.
•
Irish based administrator must be responsible
for the central administration - responsible for
accounting, NAV calculation, keeping register of
shareholders.
•
Management Company if set up
as a Unit Trust or CCF.
•
Two Irish resident directors.
•
Irish based custodian/trustee.
•
Irish regulated external auditor.
•
Irish based administrator must
be responsible for the central administration -
responsible for accounting, NAV calculation,
keeping register of shareholders.
•
Management Company if set up
as a Unit Trust or CCF.

•
Management Agreement
(Optional for Investment Company).
•
Investment Advisory Agreement.
•
Administration Agreement.
•
Transfer Agency Agreement.
•
Distribution Agreement.
•
Paying Agent/Facilities Agent Agreement
(If applicable).
•
Prime Brokerage Agreement
(If applicable).
•
Letter of application/ application form.
•
Fund profi le.
•
Prospectus.
•
Memorandum & Articles of Association
(Investment Company).
•
Trust Deed (Unit Trust).
•
Deed of Constitution (CCF).

The quarterly OFII return must be
submitted to the Statistics Department of
the Central Bank of Ireland within ten
working days of the end-quarter to which
it refers. This data should be consistent
with what is reported on the equivalent
monthly NAV return. For more
information, please visit the Central Bank
website
The monthly return should be submitted
to: The Funds Team, Statistics
Department, Central Bank of Ireland,
within ten working days of each month
end from authorisation date.
A reporting code is assigned to each
scheme on authorisation.
The UCITS/ Non UCITS notices set out
further details of the reporting
requirements applicable to each scheme.
• UCITS Part 7.1 sets out information to be
included in monthly returns to the
Central Bank on the UCITS.
• UCITS Part 8.2 and Appendices A and B
sets out information on the publication
of annual and half-yearly reports.
• NU 10 sets out information to be
included in monthly returns to the
Central Bank.
• NU 11 and Appendices A and B sets out
information on the publication of annual

system.
The following will assist you in completing
your returns:
• Online Reporting System User Manual -
Fund Service Providers.
• FINREP for Fund Service Providers -
Guidance Note.
• FINREP for Fund Service Providers -
Guidance Note - Appendix 1.
Internal Audit Reports
Copies of reports from Internal Audits
carried out on UCITS/non UCITS
Management Companies are required to
be submitted to the Central Bank.
22 Right time, right place 2012
Management Company
In relation to the Management Company
aspect, all Management Companies must
ensure that they are now compliant with
the Markets in Financial Investment
Directive (MiFID) provisions with have
been added to UCITS IV. The Markets in
Financial Investment Directive (MiFID) is
a European Union Law that provides
harmonised regulation for investment
services across the Member States of the
European Economic Area (EEA). This also
applies to self managed UCITS.
Requirements in relation to Irish
Management Companies are outlined in

UCITS/ non UCITS Management
Companies are required to report any
material breaches, pricing errors and
compensation payments to the Central
Bank.
The application of UCITS IV in
Ireland
UCITS IV introduces changes in the
following areas: Notifi cation procedure,
Management companies, Key Investor
Document, Mergers and Master Feeder
structures.
Not all of the above are mandatory, the
changes in relation to mergers & master
feeder structures will only impact clients
who chose to use them.
On the 29 June 2011, the Minister for
Finance signed legislation that transposes
UCITS IV into Irish law. The Statutory
Instrument 352 of 2011 consolidates all
previous UCITS legislation and includes
the provisions of the UCITS IV Directive
including: the management company
passport, the Key Investor Information
Document, simplifi ed notifi cation
procedures for cross-border marketing, as
well as provisions for cross-border mergers
and master-feeder structures.
The Central Bank of Ireland has issued
revised Notices and Guidance Notes to

Irish company law enacted in September
2010 introduced new provisions
enhancing the effi ciency and simplifying
the process of offshore corporate
investment fund re-domiciliation to
Ireland.
Pursuant to the legislation, existing
offshore funds in the following approved
jurisdictions can redomicile to Ireland: the
Cayman Islands, the British Virgin Islands,
Jersey, Guernesy and the Isle of Man.
Other jurisdictions may be added by order
of the Irish Minister for Enterprise Trade
and Innovation.
Notifi cation Procedure- Inward
marketing
The new notifi cation procedure for the
cross border marketing UCITS funds in the
European Union will be regulator-to-
regulator. The UCITS home Member State
regulator will have only a maximum of 10
working days to review a notifi cation fi le
(standardised in form and content) and to
transmit it to the host Member State
regulator, thereby triggering the
immediate right to start marketing
activities in that country. Upon sending of
the notifi cation email including the UCITS
documentation, the home Member State
regulator shall inform the UCITS of its

a clear framework ensuring minimal
disruption to day-to-day management and
distribution of the funds whilst preserving
their legal identity. The legal (registering
with the Companies Registration Offi ce
(CRO)) and regulatory (approval by the
Central Bank), processes involved in
re-domiciliation are relatively
straightforward minimising the
administrative burden of migration. The
Central Bank of Ireland issued a “Guidance
Letter” outlining the practical steps
involved for both corporate funds and unit
trusts. Where a fund is a unit trust there is
no need to fi le with the CRO, however
additional documentation will be required
for submission to the Central Bank.
Post migration, there is an obligation on
the migrating company to submit, within 3
days of registration in Ireland,
confi rmation of de- registration from its
original domicile to the Central Bank and
to comply with applicable Irish corporate
and regulatory requirements on an
ongoing basis.
Re-domiciliation allows offshore corporate
funds to maintain its legal entity whilst
existing shareholders’ shares remain
unaffected. However some changes will be
required including change of registered