Tuesday 21 August 2018

Legal heavyweights back funds-industry bid for ministerial order on Bermuda and Guernsey

Finance Minister Paschal Donohoe Photo: Fergal Phillips
Finance Minister Paschal Donohoe Photo: Fergal Phillips

Fearghal O'Connor

Twelve of the country's biggest law firms have backed a move by the Irish funds industry to ensure it can continue to legally transfer investment funds to and from a number of jurisdictions often regarded as the world's major tax havens.

The Irish Funds Association, which represents a sector that has made Ireland a key location for such funds, asked Finance Minister Paschal Donohoe to pass statutory instruments to allow funds to migrate to and from certain jurisdictions.

It has sent the Department of Finance a letter of legal opinion signed by law firms including A&L Goodbody, Byrne Wallace, Arthur Cox and McCann Fitzgerald. The letter detailed issues around the migration of funds to and from jurisdictions including the British Virgin Islands, Cayman Islands, Jersey, Bermuda and Guernsey.

Previous legislation providing for migration of investment funds to and from Ireland was not carried over when company law was reformed in recent years, although the department confirmed that the Irish Collective Asset Management Vehicles Act 2015 provides a framework for the re-domiciliation of investment funds to Ireland.

"Irish industry has submitted a request for the addition of two other jurisdictions (Bermuda and Guernsey) to the existing list of jurisdictions permitted to migrate investment funds into Ireland," said a department spokesman, who confirmed this would require an order from the minister via a statutory instrument.

"The submissions from Irish industry includes legal opinions regarding, for example, the comparability of shareholder protections under the Irish corporate regime and these two jurisdictions. At the moment there are three jurisdictions allowed to migrate which are the British Virgin Islands, Cayman Islands and Jersey.

"It needs to be noted that any funds that would migrate to Ireland in such circumstances would be subject to the approval of the Central Bank of Ireland and then would be subject to on-going supervision by the bank, as is the case for any other Irish-based investment fund," said the spokesman.

The department "is evaluating the submissions from industry on this issue and no decision has been made at this point regarding the addition of these two jurisdictions", he said.

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