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Ireland: ICAV – Ireland’s new corporate funds vehicle



Gerry Thornton

Padraig Twomey

Ireland is about to introduce a new corporate investment fund vehicle, with a range of attractive advantages, for fund promoters looking to establish, convert or migrate a new or existing corporate fund vehicle. The Irish collective asset-management vehicle (ICAV) will be available for both Undertakings for Collective Investment in Transferable Securities (UCITS) and alternative investment funds (AIFs).

What is the ICAV?

The ICAV is a new corporate vehicle designed specifically for Irish investment funds. The ICAV will be registered and authorised by the Central Bank of Ireland and will provide a tailor-made corporate fund vehicle for both UCITS and AIFs.

Key benefits of the ICAV

The ICAV legislation modernises the corporate fund structure and is conceived specifically with the needs of investment funds in mind. As a corporate vehicle designed solely with investment funds in mind, a fund established as an ICAV will have the advantage that it will not be subject to elements of company law not appropriate to investment funds and will not be impacted by amendments to European and domestic company legislation that are targeted at trading companies rather than investment funds.

Tax treatment of the ICAV

An important feature of the ICAV is that it should be able to elect its classification under the US "check-the-box" taxation rules. This feature should prove particularly attractive for US investors and fund managers seeking tax efficient returns in a regulated corporate fund vehicle. By electing to be treated as a transparent disregarded entity or partnership for US federal income tax purposes, the ICAV should allow US investors to be put in the same position (for US tax purposes) as if they had invested directly in the underlying investments of the ICAV. Previously, Irish funds constituted as corporate vehicles could not "check-the-box". The introduction of the ICAV, therefore, represents a significant development for fund promoters seeking to market a European fund vehicle to US investors.

While the ICAV may elect to be treated as a transparent entity for US federal income tax purposes, it will be treated as a corporate entity in Ireland and most other jurisdictions.

ICAVs will benefit from Ireland's attractive tax regime for investment funds. Each ICAV will be exempt from Irish tax on its income and gains and will not subject to any Irish tax on its net asset value. Investors who are not Irish tax resident may receive distributions from Irish domiciled funds without the deduction of any Irish withholding tax.

Leading international fund domicile

The introduction of the ICAV demonstrates Ireland's constructive approach in meeting the evolving needs of fund promoters, and its competitiveness as a leading international fund domicile. The Irish funds industry is growing at a faster rate than Europe's other major fund domiciles. Total assets of Irish domiciled funds are now €1.6 trillion ($1.8 trillion). Total assets under administration in Ireland reached record highs and exceeded the €3 trillion mark in 2014. The introduction of the ICAV will provide an additional choice for promoters, complementing the existing range of Irish fund vehicles available.

Gerry Thornton ( and Padraig Twomey (


Tel: + 353 1 232 2000 and + 353 1 232 2000


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