international funds ireland

Ireland: the location of choice

A true Gateway for theestablishment of InternationalFunds

PricewaterhouseCoopers

Agenda

• Introduction

• Ireland’s success in the Investment Management industry

• The products Ireland has to offer

• Why set up your International Funds in Ireland?

• About PwC in Ireland

• Ireland as a location for Shariah funds

• Emerging and popular Islamic Investment Funds in Ireland

• Our Islamic Finance Team

Introduction


Discover Ireland…

• Population – 4.5 million, Total Area – 70,280 sq. km

• Only English speaking country in Europe, member of the EU,OECD.

• Well educated young workforce -

• Ireland has one of the youngest population’s in Europe withover 36% under the age of 25 years.

• The education system in Ireland is one of the best in theworld according to the 2008 independent IMD WorldCompetitiveness Report.Almost 1 million people are in fulltime education.

• Pro business environment – 2008-2012 Business EnvironmentRanking of the Economist Intelligence Unit placed Ireland 11thglobally out of 82 countries, naming it as one of the mostattractive business locations in the world.

• A politically stable country and respected regulatory regime.

• Strategic location with easy access to the EMEA region.

• Excellent IT skills and infrastructure.

• Quality of living - Dublin ranked 25th out of 215 (in top 12%) inthe Mercer 2009 Quality of Living Global City rankings, ahead ofseveral major cities including Paris (33rd), London (38th), andBarcelona (42nd).

• Ireland has a significant international tax treaty network.Ireland does not appear on either the grey or black OECD taxhaven lists.


Financial Services in Ireland today …

Home to 25 of top 50 world banks

One of the largest investmentmanagement centres in the world

European location for life, non life,captives, reinsurance, securitization

20,000 + employed in InternationalFinancial Services Centre and 50,000in Financial Services

All island economy


Who we are and why are we here?

• Islamic Finance growth :• Islamic finance assets are set to reach US$1.6 trillion

by 2012 from US$660 billion of assets at the end of2007, according to global management consultingfirm Oliver Wyman.

• It is expected that within the next decade, 50-60% ofthe total savings of the world's 1.2 billion Muslims willbe in the form of Shariah compliant products.

• Ireland as a domicile for Shariah funds:• A number of new centres of the domiciliation and

servicing of Shariah funds have begun to emerge inEurope. Ireland is one such domicile which isexperiencing a rapidly growing interest in this area.

• Asset Managers and Banks can use Ireland as a hubto launch their Shariah funds where they candistribute their funds from to shareholders on aEuropean/Worldwide basis.

• 353 fund promoters from over 50 countries have setup Irish domiciled funds which are distributed to over60 countries across Europe, Asia, the Americas, theMiddle East and Africa.

Ireland’s success in the InvestmentManagement industry


Ireland’s Success in the Investment Management industry

• As of February 2009, Ireland has assets undermanagement of EUR 1.43 trillion in over 10,000 funds,according to statistics from the Irish Financial Regulatorand the Irish Funds Industry Association (IFIA).

• Fund promoters can rely on Ireland as a ‘one-stop-shop’ for the establishment of management companies,the domiciliation of funds and unparalleled experienceservicing of all types of instruments. An abundance ofthe big players of the fund servicing world are situatedin Ireland, with an extensive range of services availableincluding fund administrators, lawyers, custodians etc.

• Ireland is a mature funds market with 20 years ofexperience in dealing with a broad range of fundstructures.

• Memoranda of Understanding: Ireland has entered intobilateral MoUs with China; Dubai; Hong Kong; Isle ofMan; Jersey; South Africa; Switzerland and USA. Anew MoU with Taiwan is under negotiation. Within theEU, Ireland cooperates with all relevant authorities onbasis of the provisions of the European directives.

• 12,000 skilled employees with availability of industry-wide training (over 9,500 employed directly by fundadministrators and over 2,500 employed in associatedservices, e.g. legal, tax, audit, listing etc.)


Ireland – a world leader

• Largest hedge fund administration centre in the world.(Ireland services an estimated EUR 799 bn in HFassets as of Dec 2008, representing approx. 41% ofglobal HF assets, Source: IFIA & HFM Week)

• Largest number of stock exchange listed investmentfunds. (1,605 investment funds (2,209 sub funds) listedas of Dec 2008, Source: ISE)

• A leading European domicile for exchange tradedfunds. (Irish ETFs were valued at EUR 31.5 bn as ofOctober 2008, Source BGI Global Investors)

• Fastest growing European and UCITS fundadministration centre over the past five years. (Irishdomiciled net assets grew by 49% between 2004-2008;the European average for the same period was 15%,Source: Central Bank of Ireland & EFAMA)

• A leading European domicile for money market funds.(EUR 330 bn in Irish domiciled money market funds asof Feb 2009, Source: Central Bank of Ireland)

• A recognised EU and OECD, open and tax transparentjurisdiction with the lowest headline corporate tax ratein the OECD.


Ireland – A Substantial and Growing Jurisdiction

856bn

1,400bn2008

UCIT

S

2006 919bn

Irish Administered Alternative Assets

2007 1,380 bn


Fitzrovia figures @ 30/06/08

Growth in Assets of Funds serviced in Dublin

Growth in Assets of Funds serviced in Dublin

0200400

600800

10001200

140016001800

2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

$b

illi

on

s

$ billions


Ireland PromotersDomiciled Market Share Ranking by Assets as at 30 June 2008

Company Name Assets in US$Million Prior Year Assets in US$Million

1 Barclays 163,877 134,052

2 Goldman Sachs 99,910 81,905

3 HSBC 56,268 37,268

4 Russell Investments 48,492 53,824

5 Vanguard Group 39,219 36,648

6 Royal Bank of Scotland 39,048 12,609

7 Insight Investment 36,315 28,556

8 State Street 29,132 19,513

9 Blackrock Financial Management 27,979 16,837

10 PIMCO 25,763 21,313

Total Irish Domiciled Funds 1,240,859 1,100, 182

Source: Fitzrovia figures @ 30/06/08

The products Ireland has to offer


UCITS – the product of choice for retail investments

• UCITS is the product of choice in Ireland for fundmanagers looking to set up the following types of funds:

• Exchange Traded Funds• Money Market Funds• Index Funds• Equity Funds• 130/30 Funds

• The UCITS product is suited to managers who would liketo distribute their funds to shareholders on a worldwidebasis. UCITS funds may avail of a “passport” allowingdistribution throughout the EU without having to undergoauthorisation in each individual jurisdiction. UCITS nowrecognised as a global brand of quality for retailinvestment funds.

• 353 fund promoters from over 50 countries have set upIrish domiciled funds which are distributed to over 60countries across Europe, Asia, the Americas, the MiddleEast and Africa.

• No minimum subscription required.

• Regulatory approval : 4-6 weeks.

• Legal Structures: Investment Company, Unit Trust andCommon Contractual Fund (CCF).


The ‘Super QIF’ – the product of choice for alternative investments

• The QIF is suitable for sophisticated investors namelyinstitutional and high net worth individuals.

• It is a flexible regulated fund structure and has noinvestment restrictions.

• The QIF is the product of choice in Ireland for fundmanagers looking to set up the following types of funds:

• Hedge funds• Property funds• Venture capital• Private Equity• Futures and options• Fund of hedge funds

• Investor subscription:• Qualifying Investor non-UCITS (Minimum Euro

250,000 + wealth criteria)

• Regulatory approval : 24 hours.

• Legal Structures: Common Contractual Fund (CCF),Investment Company , Unit Trust and Investment LimitedPartnership.

Why set up yourinternational funds in Ireland?


Highly regarded and well regulated environment forinvestment funds.

A leading location for the administration of internationalUCITS funds.

Ireland is the largest hedge fund administration centre inthe world.

A leading cross border jurisdiction for Exchange TradedFunds and Money Market Funds in Europe.

There are now over 4,400 funds and sub-funds listed onthe Irish Stock Exchange, making it the largestexchange in the world for funds listing.

Speed to market: 24 hour approval process available forQualifying Investor Funds (QIFs) and an average 4-6weeks for all other fund structures .

Fast track promoter approval – within one week ofapplication.

Flexible, proactive regulatory environment. Location – optimum time zone to ensure global

coverage. Only English speaking country in the Eurozone, Euro

currency Extensive industry experience and expertise. In Ireland

today there are over 12,000 people employed directly inthe investment fund industry.

Dedicated Shariah unit within the Irish FinancialRegulator.

12 Compelling Reasons to Choose Ireland


Ireland is the only major international fund domicile thatis noted as having adopted the key taxation standardsand principles of the OECD. Ireland does not appear oneither the grey or black OECD tax haven lists.

Ireland is a recognised EU and OECD, open and taxtransparent, jurisdiction with the lowest headlinecorporate tax rate in the OECD of 12.5%.

Irish regulated investment funds are exempt from Irishtax on their income and gains irrespective of investors’residency.

No Irish withholding taxes apply on distributions fromIrish funds for non Irish investors.

Irish collective investment funds are not obliged tocharge VAT and most of the services provided to a fundare exempt from VAT.

Common Contractual Funds (CCFs) – tax transparentvehicles.

No stamp duty or capital duty charges on theestablishment of a collective investment fund.

Double Taxation Treaties – 50 tax agreements, 6additional new treaties underway. Irish domiciled fundshave access to the US double taxation treaty where afund is demonstrated to be trading. This is aconsiderable advantage for Exchange Traded Funds(ETFs).

Irish Tax Benefits


• EU Savings Directive adopted in Ireland –exchanging of informationregime instead of application of withholding taxes.

• Irish risk management process is based on guidance notes with built inflexibility. Risk monitoring for non-sophisticated funds in Ireland is on adaily basis. In Ireland the risk management process is not theresponsibility of any designated individual.

• Irish funds distribute to over 60 countries, 353 fund promoters havedomiciled funds in Ireland, 786 fund promoters have funds serviced inIreland.

• Ireland has entered into bilateral memoranda of understanding withthe following jurisdictions outside the EU: China, Dubai, Hong Kong, Isleof Man, Jersey, South Africa, Switzerland and the USA. Future MOUplanned with Taiwan.

• Fastest growing European and UCITS fund administration centre overthe past five years. (Irish domiciled net assets grew by 49% between2004-2008; the European average for the same period was 15%, Source:Central Bank of Ireland & EFAMA).

• Promoter capital: Irish promoters must have minimum net shareholder’sfunds of €635,000, or equivalent in another currency.

• Promoter liability – Irish promoters not legally responsible for losses offunds, as long as due care has been provided.

• The Financial Regulator's Notices specifically require the custodian toact in the interests of the unit holders in the funds. This providessignificant comfort to investors. The custodian will be directly liable to theunit holders for any unjustifiable failure to perform its obligations orimproper performance of them. Such duties will also extend to thecustodian's appointment of any sub-custodians, which is of particularimportance to investors where assets are likely to be held in variousjurisdictions outside Ireland.

Other Distinguishing Factors

About PwC in Ireland


PricewaterhouseCoopers is the leading professionalservices firm in Ireland. According to the encyclopaediaof the Irish funds industry 2008, we audit 64% of themarket share by sub fund assets.

In PwC Ireland, the IM practice is the largest part of theIrish firm (20%). This group has approximately 400people, 20 partners/ 50+ Directors/Managers. It is alsothe 5th largest Investment Management practice inEurope.

We also have in-depth understanding of the operationalprocesses and procedures of a Fund and acomprehensive knowledge of fund accounting practicesacross all major jurisdictions.

PwC Ireland has a thorough understanding of theregulatory and taxation environment for InvestmentManagement companies located in Ireland.

PwC Ireland has involvement with many differentindustry bodies including – Irish Funds IndustryAssociation (IFIA), Organisation for EconomicCooperation and Development (OECD), InternationalOrganisation of Securities Commissions (IOSCO),Alternative Investment Management Association (AIMA)etc

Our Practice in the Investment Management Industry in Ireland


Our Market Share

Combined Market Share by number of Subfunds

39%

28%

20%

9% 4%PwC

KPMG

E&Y

Deloitte

Others

Ireland – Combined (Irish and non-Irish Domiciled) Market Share

Information as at 30 June 2008. Source: Fitzrovia Dublin Fund Encyclopaedia: 2008

Combined Market Share by Subfund Assets

55%23%

17%

4%

1%

PwC

KPMG

E&Y

Deloitte

Others


Irish Domiciled Market Share by Subfund

47%

23%

18%

9% 3%PwC

KPMG

E&Y

Deloitte

Others

Ireland – Irish Domiciled Market Share

Information as at 30 June 2008. Source: Fitzrovia Dublin Fund Encyclopaedia: 2008

Irish Domiciled Market Share by Subfund Assets

64%20%

12%

3%

1%

PwC

KPMG

E&Y

Deloitte

Others

Our Market Share Continued..


Examples of our recent thought leadership* materials include:

PwC – Thought Leadership publications

Ireland as a location forShariah funds


Irish Financial Regulator’s new Shariah regulatory team

• In light of the significant activity within Shariah investmentfunds in Ireland the Irish Financial Services RegulatoryAuthority (the “Financial Regulator”) has confirmed theestablishment of a dedicated regulatory team for theauthorisation of Shariah funds in Ireland.

• In the last year, there has been an increased proliferationof Shariah financial products being domiciled andadministered in Ireland.

• This announcement of a dedicated Shariah regulatory teamdemonstrates Ireland’s flexible and proactive regulatoryenvironment and further cements Ireland’s attractivenessas a domicile of choice for Shariah investment funds.

• The new Shariah regulatory team will ensure efficiency andconsistency when processing Shariah applications.

• In addition to this, the Financial Regulator has alsoconfirmed that it will proactively engage with its regulatorycounterparts in MENA (Middle East & North Africa)countries and other jurisdictions in order to share anunderstanding of the respective regulatory systems.

• This new development should be encouraging for Shariahcompliant Asset Managers who are looking to expand theircurrent distribution to Europe and the Far East throughsetting up of Irish UCITS.


PwC - Leading the way in Islamic Finance in Ireland

• PwC have established a dedicated Islamic Finance teamcomprising of experts from various line of service includingAudit, Advisory, Regulatory and Taxation enabling us toprovide comprehensive service to our clients.

• Our group has a detailed understanding of Shariahprinciples, covering various school of thoughts in Islam.

• PwC have issued various publications on the subject forAccountancy Ireland, Finance Magazine, SundayBusiness Post, PwC global Newsletter, Islamic FinanceNews etc.

• PwC has a representation on the Industry Shariah expertgroup advising on various issues, such as purification ofnon Islamic income, custody of Shariah funds assets etc.


We are proud of our track record in producing thought leadership and advisory publications in the Financial Services sector.Examples of our recent thought leadership* specific to Shariah funds include:

PwC - Thought leadership in the industry on Islamic Finance

We have also written a number of articles on Shariah Funds for publications such as, Finance Dublin, Accountancy Ireland,Sunday Business Post , Euromoney etc


PwC - Our Experience with Shariah Funds

• Advice on set up of various Islamic fund structures inIreland including UCITS, hedge funds, fund of funds andETF’s.

• Undertook a Gap assessment project for an Irish fundadministrator to advise them on how they would serviceShariah compliant funds.

• Provision of advice on Purification of non Islamic Incometo an Investment Manager establishing Shariahcompliant funds.

• Provided Islamic Instruments support from accountingand classification perspective to an Irish administratorservicing Shariah compliant funds.

Emerging and popular IslamicInvestment Funds

in Ireland


Islamic Investment Funds established in Ireland to date

• Equity funds

• Exchange Traded Funds (ETFs)

• Fund of Hedge Funds

• Murabaha and Mudaraba

• Sukuk

• Long / Short (hedge funds)

• MMF’s being created

Our Islamic Finance Team


Islamic Finance Service Team

Ken Owens (Shariah Funds Assurance Partner)• Ken is a Partner in the Financial Services Group specializing in assisting clients with a wide range of

international funds administered in Dublin. He has extensive knowledge and experience in advisinginvestment management clients including UCITS funds, Alternative Investments funds and AssetManagers in Ireland. He provides a range of services to his clients including audit, SAS 70 controlsreporting and regulatory advisory services. Ken leads the PwC Investment Management RegulatoryPractice. Over the years Ken has assisted clients in structuring new funds and advised on variousaccounting, tax and operational matters. Ken has been involved with the Dublin Funds IndustryAssociation (“IFIA”) for a number of years and has lectured on auditing and accounting issues to theindustry on behalf of the IFIA and the Institute of Chartered Accountants in Ireland. Ken is a member ofthe Auditing Standards Committee of the Institute of Chartered Accountants in Ireland. Ken is achartered accountant and has a degree in accounting and finance from the Dublin City University. Kennow leads the Islamic Finance Practice at PwC in Ireland.

Pat Wall (Tax Structuring Partner)• Pat Wall is a senior partner specialising in international taxation particular focus on the investment

management and insurance industries. He is a partner with the firm since 1986 and throughout thattime he has specialised in international financial services. He has been associated with thedevelopment of Dublin’s financial services sector from its inception and he has played an important rolein the development of Ireland’s tax policy on the international financial services. He was activelyinvolved in the transposition of the original EU directive on UCITS which laid the foundation for thefunds industry in Dublin. His was twice voted one of Ireland’s leading tax advisers by International TaxReview. Pat currently sits on the Irish Prime Minister’s International Financial Services Centre ClearingHouse Group (IFSC CHG), which has overall responsibility for competitive policy in internationalfinancial services. Pat is a member of PwC’s European Investment Management Group. In the past hehas served on the firm’s international investment funds group with special responsibilities forinternational financial centres.


Islamic Finance Service Team

Pat Candon (Assurance Partner)

• Pat worked in the Channel Islands for a number of years, specialising in the mutual funds industry. Onreturning to Dublin in 1990 he assisted in the set up of our specialist funds audit group. He has lecturedextensively on the auditing and accounting aspects of funds. Pat has worked exclusively in the Irish firm’sinvestment management practice, assisting clients in the structuring and audit of a wide range ofinternational funds administered in Dublin. Pat became the audit leader for the Dublin firm's investmentmanagement practice on 1 July 2003 and served in that role until 30 June 2007. He was also a memberof the firm's audit leadership team in that period. He has been a member of the Irish Funds IndustryAssociation marketing committee and served on the organizing committee of the annual IFIA/NICSAconference for two years.

Omer Khan (Shariah Funds Assurance Manager)

• Omer is a Manager with the Investment Management Group in Dublin and has significant experienceworking on IFRS/Irish GAAP Funds in financial services industry. Omer is the lead manager of PwCIreland’s Islamic Finance Group which has been recently established to assist clients in the IslamicFinance area. He is also a manger on a number of investment funds targeted at the Islamic Market whichare currently administered out of Ireland. Omer is the author of several articles on Islamic Finance inIrish/European publications. Omer was involved in the implementation of a service offering around adviceand support on the set up of Shariah Fund Administration in Ireland - Gap Assessment. He has alsoadvised on set up of various Islamic fund structures in Ireland and provided advice on: Purification of nonIslamic Income, Islamic Instruments support from accounting and classification perspective, Investmentrestriction monitoring, Cash Management & Custody of Assets.


Islamic Finance Service Team - continued

SA1 (Assurance)

SA2 (Assurance)

AM2 (Assurance)

AM2 (Assurance)

Tax Manager

Assurance Manager

Assurance Manager

Tax Director

Tax Partner

Advisory Partner

Assurance Partner

Assurance Partner

E: [email protected]: (00) 353 1 792 7908Nadir Asghar

E: [email protected]: (00) 353 1 792 5213Salahuddin Ghaznawi

E: [email protected]: (00) 353 1 792 7572Faisal Ismail

E: [email protected]: (00) 353 1 792 8538Pat Candon

E: [email protected]: (00) 353 1 792 7147Yvonne Thompson

E: [email protected]: (00) 353 1 792 6984Hasan Mahmood

E: [email protected]: (00) 353 1 792 8602Pat Wall

E: [email protected]: (00) 353 1 792 8171Omer Khan

E: andy.o’[email protected]: (00) 353 1 792 6247Andy O’Callaghan

E: [email protected]: (00) 353 1 792 8542Ken Owens

E: [email protected]: (00) 353 1 792 6702Caitriona Jennings

E: [email protected]: (00) 353 1 792 7417Pankaj Arora

PricewaterhouseCoopers Copyright

© 2009 PricewaterhouseCoopers. All rights reserved. "PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopersInternational Limited, each of which is a separate and independent legal entity. PricewaterhouseCoopers, One Spencer Dock, North Wall Quay, Dublin 1 isauthorised by the Institute of Chartered Accountants in Ireland to carry on investment business.

Any Questions?

international funds ireland

Documents