Exchange Traded Funds in Ireland
Exchange Traded Funds in IrelandUpdated on Tuesday 13th September 2016
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The Exchange Traded Funds (ETFs) were launched at the level of the European Union (EU) in 2000. Since then, Ireland became the dominant market for the domiciliation of such investment funds, as approximately 50% of all the ETFs set up in the EU are registered in Ireland. The ETFs are addressed to professional investors, as they can carry out investment policies on the stock market. Our team of Irish lawyers can offer legal assistance for the registration of an ETF in accordance with the investment plans of the businessmen.
What is an exchange traded fund?
The exchange traded fund is a type of investment fund which can own underlying assets such as stocks, bonds, gold bars or foreign currency. In an EFT, the shareholders divide the ownership of such assets into shares. According to the applicable legislation in Ireland, an EFT can be set up as an alternative investment fund (AIF) or as undertakings for collective investment in transferable securities (UCITS).
It is important to know that UCITS are the preferred investment vehicles in the case of the European small investors, a trend which is also available in Ireland. The UCITS are very popular because they provide a high level of protection for the investors and solid regulations for risk management strategies; our law firm in Ireland can offer more details on the UCITS regulations.
ETFs registered as an UCITS in Ireland
The ETFs which are registered as UCITS can be set up as one of the following:
• corporate vehicles;
• trust vehicles.
Furthermore, an ETF allows the registration of multiple sub-funds (umbrella funds), which provides the opportunity to conduct several investment strategies at the same time.
Taxation of Irish ETFs
Since the ETFs are collective investment funds, the taxation of such entities is performed following the regulations of the Tax Consolidation Act. In the situation of ETFs registered in Ireland, incomes and other gains are taxed following a self-assessment tax return submitted by the investors, which is applicable at the rate of 41%.
Businessmen interested in receiving more details on the exchange traded funds in Ireland can contact our Irish law firm.