New legislation to help in attracting funds companies to Ireland
Process of re-locating funds to Ireland simplified
Move highlights importance placed on Irish funds industry
The Companies (Miscellaneous Provisions) Act 2009, passed by Seanad Éireann on Friday 18th December, facilitates non-Irish funds companies re-domiciling to Ireland in a simple and business friendly procedure. This is a significant move in attracting funds companies to locate here. Under the legislation, any funds company will continue its existence, but will do so under Irish law. It also ensures that the process of re-domiciling is made as simple as possible.
Deirdre Power, Financial Services Tax Partner, Deloitte commented: “On the back of the Minister’s comments in his Budget speech where he acknowledged the importance of the international funds industry to the Irish economy, this is a very welcome development. Fundamentally, this new legislation means that companies can re-locate to Ireland in a hassle free and cost effective manner.
“In the international market, fund houses are looking to locate in quality jurisdictions in addition to ensuring operational costs remain low. By removing both the cost and administrative burden of locating in Ireland, many fund houses will be encouraged to look at it as their location of choice, thanks to the many advantages Ireland offers.
“Ireland has an excellent regulatory framework and a wealth of quality service providers with proven expertise. It has a proven track record in offering innovative solutions to the needs of fund houses and is extremely tax effective. These factors now hold even more weight when coupled with the effects of this new legislation.”
There are a number of advantages for companies who re-domicile under this new legislation. Firstly, the company continues as normal and maintains its performance track record. Shareholders do not have to swap shares in any way, thereby avoiding any potential risk to capital gains tax on the disposal of shares.
In addition, the administrative aspects of creating a new fund are eliminated, as are any tax issues that previously may have arisen on moving assets between funds.
The legislation provides that the migrating fund will need to seek certain authorisation from the Irish Financial Regulator as either a UCITS or non UCITS Company. It is envisaged that fund companies will only be permitted to re-domicile to Ireland if the laws of the country of their original registration permit both outward re-domiciliation and inward re-domiciliation. A specific list will be compiled as to those countries, but it is likely to include (among others) the Cayman Islands, the British Virgin Islands, Bermuda and the Channel Islands.
“In line with these regulatory amendments, changes will be made in the forthcoming Finance Bill, which will facilitate the tax aspects of re-domiciliation. The intention is that the same funds benefits that currently accrue to Irish fund companies will also be extended to re-domiciled companies. All of these measures will help in ensuring that Ireland remains at the forefront of the international funds industry.” concluded Deirdre Power.
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