tax & jurisdiction
Ireland is the first country in the European Union where Ucits can be established under corporate, trust and contract structures.
This means that the country will now be able to host pooled pension schemes. The hope is that it will attract multinational companies ' with employees working internationally ' to base corporate pension plans in the jurisdiction.
Luxembourg is also priming itself as a location for pooled pension structures. However, unlike Dublin, the back bone of the Grand Duchy's financial services is in retail funds and associated administration. Dublin has already tailored its financial services towards the institutional marketplace.
The country has signed into its law provisions for consolidated Ucits regulations, allowing the establishment of a Common Contractual Fund (CCF) structure.
This is a significant development for Ireland's financial services sector. According to the Dublin Funds Industry Association (DFIA): 'The availability of the CCF will enable, among other things, the establishment in Ireland of an internationally-recognised pooled pension structure.
'It is expected that this contract structure will have particular appeal to multinational companies, which operate pension schemes in a number of different jurisdictions for the benefit of employees in those jurisdictions.'
This legislation follows on from a provision in the country's Finance Act 2003, which requires CCFs to be fiscally transparent vehicles for Irish tax purposes.
Mary Harney, the country's deputy prime minister, signed the statutory instrument into Irish law at the start of June. It was announced at the DFIA/NICSA sixth annual global funds conference held in Dublin at the same time.
Harney also signed a statutory instrument which transposes the amended Ucits product directive (Ucits III) into Irish law.
In the process of updating the Ucits law, the Irish government has ensured that the transition poses minimum inconvenience to fund promoters.
'During the transition period, Irish Ucits can be established under the provisions of the existing directive or under the provisions of the amending directive,' said the DFIA.
According to the DFIA, this highlights the pragmatic approach of the regulator and legislature in ensuring, where possible, legislation is enacted in the most pragmatic way possible.
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