International Funds Ireland
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International Funds Ireland

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    International Funds Ireland International Funds Ireland Presentation Transcript

    • Ireland: the location of choice A true Gateway for the establishment of International Funds
    • 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 PricewaterhouseCoopers Page 2
    • 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 with over 36% under the age of 25 years. • The education system in Ireland is one of the best in the world according to the 2008 independent IMD World Competitiveness Report.Almost 1 million people are in full time education. • Pro business environment – 2008-2012 Business Environment Ranking of the Economist Intelligence Unit placed Ireland 11th globally out of 82 countries, naming it as one of the most attractive 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%) in the Mercer 2009 Quality of Living Global City rankings, ahead of several major cities including Paris (33rd), London (38th), and Barcelona (42nd). • Ireland has a significant international tax treaty network. Ireland does not appear on either the grey or black OECD tax haven lists. PricewaterhouseCoopers Page 4
    • Financial Services in Ireland today …  Home to 25 of top 50 world banks One of the largest investment management centres in the world  European location for life, non life, captives, reinsurance, securitization  20,000 + employed in International Financial Services Centre and 50,000 in Financial Services  All island economy PricewaterhouseCoopers Page 5
    • 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 of 2007, according to global management consulting firm Oliver Wyman. • It is expected that within the next decade, 50-60% of the total savings of the world's 1.2 billion Muslims will be 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 in Europe. Ireland is one such domicile which is experiencing a rapidly growing interest in this area. • Asset Managers and Banks can use Ireland as a hub to launch their Shariah funds where they can distribute their funds from to shareholders on a European/Worldwide basis. • 353 fund promoters from over 50 countries have set up Irish domiciled funds which are distributed to over 60 countries across Europe, Asia, the Americas, the Middle East and Africa. PricewaterhouseCoopers Page 6
    • Ireland’s success in the Investment Management industry
    • Ireland’s Success in the Investment Management industry • As of February 2009, Ireland has assets under management of EUR 1.43 trillion in over 10,000 funds, according to statistics from the Irish Financial Regulator and 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 experience servicing of all types of instruments. An abundance of the big players of the fund servicing world are situated in Ireland, with an extensive range of services available including fund administrators, lawyers, custodians etc. • Ireland is a mature funds market with 20 years of experience in dealing with a broad range of fund structures. • Memoranda of Understanding: Ireland has entered into bilateral MoUs with China; Dubai; Hong Kong; Isle of Man; Jersey; South Africa; Switzerland and USA. A new MoU with Taiwan is under negotiation. Within the EU, Ireland cooperates with all relevant authorities on basis of the provisions of the European directives. • 12,000 skilled employees with availability of industry- wide training (over 9,500 employed directly by fund administrators and over 2,500 employed in associated services, e.g. legal, tax, audit, listing etc.) PricewaterhouseCoopers Page 8
    • Ireland – a world leader • Largest hedge fund administration centre in the world. (Ireland services an estimated EUR 799 bn in HF assets as of Dec 2008, representing approx. 41% of global HF assets, Source: IFIA & HFM Week) • Largest number of stock exchange listed investment funds. (1,605 investment funds (2,209 sub funds) listed as of Dec 2008, Source: ISE) • A leading European domicile for exchange traded funds. (Irish ETFs were valued at EUR 31.5 bn as of October 2008, Source BGI Global Investors) • Fastest growing European and UCITS fund administration centre over the past five years. (Irish domiciled 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 as of Feb 2009, Source: Central Bank of Ireland) • A recognised EU and OECD, open and tax transparent jurisdiction with the lowest headline corporate tax rate in the OECD. PricewaterhouseCoopers Page 9
    • Ireland – A Substantial and Growing Jurisdiction Irish Administered Alternative Assets UCITS 2008 1,400bn 2007 1,380 bn 2006 919bn 856bn PricewaterhouseCoopers Page 10
    • Growth in Assets of Funds serviced in Dublin Growth in Assets of Funds serviced in Dublin 1800 1600 1400 1200 $ billions 1000 $ billions 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year Fitzrovia figures @ 30/06/08 PricewaterhouseCoopers Page 11
    • Ireland Promoters Domiciled 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 PricewaterhouseCoopers Page 12
    • The products Ireland has to offer
    • UCITS – the product of choice for retail investments • UCITS is the product of choice in Ireland for fund managers 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 like to distribute their funds to shareholders on a worldwide basis. UCITS funds may avail of a “passport” allowing distribution throughout the EU without having to undergo authorisation in each individual jurisdiction. UCITS now recognised as a global brand of quality for retail investment funds. • 353 fund promoters from over 50 countries have set up Irish domiciled funds which are distributed to over 60 countries across Europe, Asia, the Americas, the Middle East and Africa. • No minimum subscription required. • Regulatory approval : 4-6 weeks. • Legal Structures: Investment Company, Unit Trust and Common Contractual Fund (CCF). PricewaterhouseCoopers Page 14
    • The ‘Super QIF’ – the product of choice for alternative investments • The QIF is suitable for sophisticated investors namely institutional and high net worth individuals. • It is a flexible regulated fund structure and has no investment restrictions. • The QIF is the product of choice in Ireland for fund managers 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 Limited Partnership. PricewaterhouseCoopers Page 15
    • Why set up your international funds in Ireland?
    • 12 Compelling Reasons to Choose Ireland  Highly regarded and well regulated environment for investment funds.  A leading location for the administration of international UCITS funds.  Ireland is the largest hedge fund administration centre in the world.  A leading cross border jurisdiction for Exchange Traded Funds and Money Market Funds in Europe.  There are now over 4,400 funds and sub-funds listed on the Irish Stock Exchange, making it the largest exchange in the world for funds listing.  Speed to market: 24 hour approval process available for Qualifying Investor Funds (QIFs) and an average 4-6 weeks for all other fund structures .  Fast track promoter approval – within one week of application.  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 in the investment fund industry.  Dedicated Shariah unit within the Irish Financial Regulator. PricewaterhouseCoopers Page 17
    • Irish Tax Benefits  Ireland is the only major international fund domicile that is noted as having adopted the key taxation standards and principles of the OECD. Ireland does not appear on either the grey or black OECD tax haven lists.  Ireland is a recognised EU and OECD, open and tax transparent, jurisdiction with the lowest headline corporate tax rate in the OECD of 12.5%.  Irish regulated investment funds are exempt from Irish tax on their income and gains irrespective of investors’ residency.  No Irish withholding taxes apply on distributions from Irish funds for non Irish investors.  Irish collective investment funds are not obliged to charge VAT and most of the services provided to a fund are exempt from VAT.  Common Contractual Funds (CCFs) – tax transparent vehicles.  No stamp duty or capital duty charges on the establishment of a collective investment fund.  Double Taxation Treaties – 50 tax agreements, 6 additional new treaties underway. Irish domiciled funds have access to the US double taxation treaty where a fund is demonstrated to be trading. This is a considerable advantage for Exchange Traded Funds (ETFs). PricewaterhouseCoopers Page 18
    • Other Distinguishing Factors • EU Savings Directive adopted in Ireland –exchanging of information regime instead of application of withholding taxes. • Irish risk management process is based on guidance notes with built in flexibility. Risk monitoring for non-sophisticated funds in Ireland is on a daily basis. In Ireland the risk management process is not the responsibility of any designated individual. • Irish funds distribute to over 60 countries, 353 fund promoters have domiciled funds in Ireland, 786 fund promoters have funds serviced in Ireland. • Ireland has entered into bilateral memoranda of understanding with the following jurisdictions outside the EU: China, Dubai, Hong Kong, Isle of Man, Jersey, South Africa, Switzerland and the USA. Future MOU planned with Taiwan. • Fastest growing European and UCITS fund administration centre over the past five years. (Irish domiciled net assets grew by 49% between 2004-2008; the European average for the same period was 15%, Source: Central Bank of Ireland & EFAMA). • Promoter capital: Irish promoters must have minimum net shareholder’s funds of €635,000, or equivalent in another currency. • Promoter liability – Irish promoters not legally responsible for losses of funds, as long as due care has been provided. • The Financial Regulator's Notices specifically require the custodian to act in the interests of the unit holders in the funds. This provides significant comfort to investors. The custodian will be directly liable to the unit holders for any unjustifiable failure to perform its obligations or improper performance of them. Such duties will also extend to the custodian's appointment of any sub-custodians, which is of particular importance to investors where assets are likely to be held in various jurisdictions outside Ireland. PricewaterhouseCoopers Page 19
    • About PwC in Ireland
    • Our Practice in the Investment Management Industry in Ireland  PricewaterhouseCoopers is the leading professional services firm in Ireland. According to the encyclopaedia of the Irish funds industry 2008, we audit 64% of the market share by sub fund assets.  In PwC Ireland, the IM practice is the largest part of the Irish firm (20%). This group has approximately 400 people, 20 partners/ 50+ Directors/Managers. It is also the 5th largest Investment Management practice in Europe.  We also have in-depth understanding of the operational processes and procedures of a Fund and a comprehensive knowledge of fund accounting practices across all major jurisdictions.  PwC Ireland has a thorough understanding of the regulatory and taxation environment for Investment Management companies located in Ireland.  PwC Ireland has involvement with many different industry bodies including – Irish Funds Industry Association (IFIA), Organisation for Economic Cooperation and Development (OECD), International Organisation of Securities Commissions (IOSCO), Alternative Investment Management Association (AIMA) PricewaterhouseCoopers etc Page 21
    • Our Market Share Ireland – Combined (Irish and non-Irish Domiciled) Market Share Combined Market Share by number of Subfunds Combined Market Share by Subfund Assets 1% 4% 9% 4% PwC 17% PwC 39% 20% KPMG KPMG E&Y E&Y Deloitte 55% Deloitte Others 23% Others 28% Information as at 30 June 2008. Source: Fitzrovia Dublin Fund Encyclopaedia: 2008 PricewaterhouseCoopers Page 22
    • Our Market Share Continued.. Ireland – Irish Domiciled Market Share Irish Domiciled Market Share by Subfund Irish Domiciled Market Share by Subfund Assets 1% 3% 9% 3% 12% PwC PwC 18% 47% KPMG KPMG E&Y E&Y Deloitte 20% Deloitte Others 64% Others 23% Information as at 30 June 2008. Source: Fitzrovia Dublin Fund Encyclopaedia: 2008 PricewaterhouseCoopers Page 23
    • PwC – Thought Leadership publications Examples of our recent thought leadership* materials include: PricewaterhouseCoopers Page 24
    • Ireland as a location for Shariah funds
    • Irish Financial Regulator’s new Shariah regulatory team • In light of the significant activity within Shariah investment funds in Ireland the Irish Financial Services Regulatory Authority (the “Financial Regulator”) has confirmed the establishment of a dedicated regulatory team for the authorisation of Shariah funds in Ireland. • In the last year, there has been an increased proliferation of Shariah financial products being domiciled and administered in Ireland. • This announcement of a dedicated Shariah regulatory team demonstrates Ireland’s flexible and proactive regulatory environment and further cements Ireland’s attractiveness as a domicile of choice for Shariah investment funds. • The new Shariah regulatory team will ensure efficiency and consistency when processing Shariah applications. • In addition to this, the Financial Regulator has also confirmed that it will proactively engage with its regulatory counterparts in MENA (Middle East & North Africa) countries and other jurisdictions in order to share an understanding of the respective regulatory systems. • This new development should be encouraging for Shariah compliant Asset Managers who are looking to expand their current distribution to Europe and the Far East through setting up of Irish UCITS. PricewaterhouseCoopers Page 26
    • PwC - Leading the way in Islamic Finance in Ireland • PwC have established a dedicated Islamic Finance team comprising of experts from various line of service including Audit, Advisory, Regulatory and Taxation enabling us to provide comprehensive service to our clients. • Our group has a detailed understanding of Shariah principles, covering various school of thoughts in Islam. • PwC have issued various publications on the subject for Accountancy Ireland, Finance Magazine, Sunday Business Post, PwC global Newsletter, Islamic Finance News etc. • PwC has a representation on the Industry Shariah expert group advising on various issues, such as purification of non Islamic income, custody of Shariah funds assets etc. PricewaterhouseCoopers Page 27
    • PwC - Thought leadership in the industry on Islamic Finance 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: We have also written a number of articles on Shariah Funds for publications such as, Finance Dublin, Accountancy Ireland, Sunday Business Post , Euromoney etc PricewaterhouseCoopers Page 28
    • PwC - Our Experience with Shariah Funds • Advice on set up of various Islamic fund structures in Ireland including UCITS, hedge funds, fund of funds and ETF’s. • Undertook a Gap assessment project for an Irish fund administrator to advise them on how they would service Shariah compliant funds. • Provision of advice on Purification of non Islamic Income to an Investment Manager establishing Shariah compliant funds. • Provided Islamic Instruments support from accounting and classification perspective to an Irish administrator servicing Shariah compliant funds. PricewaterhouseCoopers Page 29
    • Emerging and popular Islamic Investment 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 PricewaterhouseCoopers Page 31
    • 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 advising investment management clients including UCITS funds, Alternative Investments funds and Asset Managers in Ireland. He provides a range of services to his clients including audit, SAS 70 controls reporting and regulatory advisory services. Ken leads the PwC Investment Management Regulatory Practice. Over the years Ken has assisted clients in structuring new funds and advised on various accounting, tax and operational matters. Ken has been involved with the Dublin Funds Industry Association (“IFIA”) for a number of years and has lectured on auditing and accounting issues to the industry on behalf of the IFIA and the Institute of Chartered Accountants in Ireland. Ken is a member of the Auditing Standards Committee of the Institute of Chartered Accountants in Ireland. Ken is a chartered accountant and has a degree in accounting and finance from the Dublin City University. Ken now 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 that time he has specialised in international financial services. He has been associated with the development of Dublin’s financial services sector from its inception and he has played an important role in the development of Ireland’s tax policy on the international financial services. He was actively involved in the transposition of the original EU directive on UCITS which laid the foundation for the funds industry in Dublin. His was twice voted one of Ireland’s leading tax advisers by International Tax Review. Pat currently sits on the Irish Prime Minister’s International Financial Services Centre Clearing House Group (IFSC CHG), which has overall responsibility for competitive policy in international financial services. Pat is a member of PwC’s European Investment Management Group. In the past he has served on the firm’s international investment funds group with special responsibilities for international financial centres. PricewaterhouseCoopers Page 33
    • 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. On returning to Dublin in 1990 he assisted in the set up of our specialist funds audit group. He has lectured extensively on the auditing and accounting aspects of funds. Pat has worked exclusively in the Irish firm’s investment management practice, assisting clients in the structuring and audit of a wide range of international funds administered in Dublin. Pat became the audit leader for the Dublin firm's investment management practice on 1 July 2003 and served in that role until 30 June 2007. He was also a member of the firm's audit leadership team in that period. He has been a member of the Irish Funds Industry Association marketing committee and served on the organizing committee of the annual IFIA/NICSA conference for two years. Omer Khan (Shariah Funds Assurance Manager) • Omer is a Manager with the Investment Management Group in Dublin and has significant experience working on IFRS/Irish GAAP Funds in financial services industry. Omer is the lead manager of PwC Ireland’s Islamic Finance Group which has been recently established to assist clients in the Islamic Finance area. He is also a manger on a number of investment funds targeted at the Islamic Market which are currently administered out of Ireland. Omer is the author of several articles on Islamic Finance in Irish/European publications. Omer was involved in the implementation of a service offering around advice and support on the set up of Shariah Fund Administration in Ireland - Gap Assessment. He has also advised on set up of various Islamic fund structures in Ireland and provided advice on: Purification of non Islamic Income, Islamic Instruments support from accounting and classification perspective, Investment restriction monitoring, Cash Management & Custody of Assets. PricewaterhouseCoopers Page 34
    • Islamic Finance Service Team - continued Ken Owens Assurance Partner T: (00) 353 1 792 8542 E: ken.owens@ie.pwc.com Pat Candon Assurance Partner T: (00) 353 1 792 8538 E: pat.candon@ie.pwc.com Andy O’Callaghan Advisory Partner T: (00) 353 1 792 6247 E: andy.o’callaghan@ie.pwc.com Pat Wall Tax Partner T: (00) 353 1 792 8602 E: pat.wall@ie.pwc.com Yvonne Thompson Tax Director T: (00) 353 1 792 7147 E: yvonne.thompson@ie.pwc.com Omer Khan Assurance Manager T: (00) 353 1 792 8171 E: omer.khan@ie.pwc.com Hasan Mahmood Assurance Manager T: (00) 353 1 792 6984 E: hasan.mahmood@ie.pwc.com Caitriona Jennings Tax Manager T: (00) 353 1 792 6702 E: catriona.jennings@ie.pwc.com Nadir Asghar AM2 (Assurance) T: (00) 353 1 792 7908 E: nadir.x.asghar@ie.pwc.com Faisal Ismail AM2 (Assurance) T: (00) 353 1 792 7572 E: faisal.m.ismail@ie.pwc.com Salahuddin Ghaznawi SA2 (Assurance) T: (00) 353 1 792 5213 E: salahuddin.ghaznawi@ie.pwc.com Pankaj Arora SA1 (Assurance) T: (00) 353 1 792 7417 E: pankaj.arora@ie.pwc.com PricewaterhouseCoopers Page 35
    • Any Questions? PricewaterhouseCoopers Copyright © 2009 PricewaterhouseCoopers. All rights reserved. "PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. PricewaterhouseCoopers, One Spencer Dock, North Wall Quay, Dublin 1 is authorised by the Institute of Chartered Accountants in Ireland to carry on investment business.