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In March 2015 the Irish Collective Asset-management Vehicles Act 2015 (the “ICAV Act”) was signed into law by the Irish government.  The ICAV Act provides for the establishment of a new Irish corporate vehicle specifically designed as an investment fund.  Nexus Taxation has already worked on some of the first Irish Collective Asset-management Vehicles (“ICAVs”) to be authorised by the Central Bank of Ireland.  An ICAV may be established as a UCITS or AIF (e.g. QIAIF).  It is anticipated that the ICAV will become the preeminent Irish investment fund vehicle, replacing the current most popular fund vehicle – the variable capital investment company structured as a public limited company (the “Plc Fund”).

ICAVs are regarded as Investment Undertakings for Irish tax purposes and as such are entirely exempt from Irish tax on their income and gains.  In addition, no withholding or any other taxes are payable on payments or gains made by non-Irish resident shareholders in an ICAV.  Unlike the existing Plc Fund, ICAVs are able to “check the box” for US tax purposes and be treated as a partnership for US tax purposes.  This check the box election enables the ICAV therefore to avoid coming within the scope of the onerous US Passive Foreign Investment Company (“PFIC”) and Controlled Foreign Corporation (“CFC”) tax rules which may be applicable to US shareholders in corporate fund vehicles located outside of the US.  Therefore, for fund promoters seeking US taxable investors, the introduction of the ICAV fund vehicle should make Ireland a more attractive choice as a fund domicile.

For Master Feeder fund structures, an ICAV with ‘check the box’ election made acting as the corporate Master may be combined with another ICAV (without a check the box election made, or indeed a Plc Fund) as a feeder for non-US and US tax-exempt investors, with US taxable investors using existing favoured feeder vehicles such as a Delaware limited partnership.

The most appropriate fund structure will be dependent on a number of factors, we can work with you and our network of legal, accounting and other funds service providers to achieve the optimal structure for you and your investors.


To find out more about the ICAV fund vehicle please contact Partner at Nexus Taxation, Patrick McClafferty partrickmcclafferty@nexustaxation.com