Measures aim to make funds sector more competitive

INVESTMENTS:FOLLOWING THE assertion in last December's budget that Ireland's "competitive edge" would be strengthened in the international funds sector, the Finance Bill has introduced measures aimed at fulfilling this goal.

Brendan Kelly, a director with Financial Services Ireland, described the package of measures, which also included changes to the remittance basis of taxation and the introduction of measures for Sharia funds, as “one of the most significant boosts for the IFSC in the last decade”.

He said the changes would help to “make Ireland the location of choice as firms rebuild in the aftermath of the global economic crisis”.

Several changes were signalled yesterday, including measures aimed at enhancing Ireland’s offering ahead of the introduction of the UCITS IV (undertaking for collective investments in transferable securities) directive next year.

Under this directive, a European passport for management companies will be created, which will make the funds landscape more competitive.

However, Brian McDermott, head of AL Goodbody’s investment funds group, said UCITS IV would present “as many opportunities as threats” and yesterday’s clarification regarding the tax treatment that would apply to foreign funds managed from Ireland was welcome.

Additional measures aimed at the funds sector and outlined in the Bill include the exemption from completion of non-resident declarations for foreign investors in Irish-domiciled funds that are not marketed within Ireland, and the extension of stamp duty to accommodate mergers of investment undertakings.

While Deirdre Power, a partner in Deloitte, also approved of the changes, she added that a “major disappointment” was the lack of proposed changes on facilitating cash-pooling activities.