Tax incentives for funds in Ireland: the ICAV regime

Nikita Veremeev

20.02.2026 | 6 min read

Updated: 20.02.2026

Since 2016 I have been leading COREDO through dozens of projects to register fund structures in the EU, Asia and the CIS, and during this time Ireland has consistently remained at the top for the combination of regulatory predictability, tax benefits for funds and high-quality provider infrastructure. When I receive a request for an international fund registration with subsequent licensing and comprehensive AML support, I first assess the applicability of the ICAV (Irish Collective Asset-management Vehicle) regime. This form was created specifically for investment funds and hedge funds and provides precise answers to founders’ pain points: speed of launch, the tax neutrality of ICAV for investment funds, flexibility of structuring and effective cross-border distribution.

COREDO’s practice confirms: ICAV is a tool for those who want controlled EU passporting under AIFMD or UCITS, a wide funnel of institutional investors and compliance that withstands Due Diligence by any global LP. In this article I have gathered strategic and practical aspects: differences between ICAV and Ltd and PLC, tax regimes and incentives, requirements of the central regulator, KYC/AML procedures, substance, as well as a step-by-step guide to registering an ICAV in Ireland and subsequent supervision by the Central Bank of Ireland.

How an ICAV differs from a Ltd company and a PLC

Illustration for the section «How ICAV differs from Ltd and PLC» in the article «Tax incentives for funds in Ireland – ICAV regime»
ICAV: it is a separate legal regime for collective asset management in Ireland, designed for investment purposes and compliant with AIFMD and UCITS. Unlike Ltd and PLC, it is not a corporate “universal” form, but a specialised fund vehicle operating as an investment undertaking with specific tax consequences and reporting. This positioning allows ICAV to obtain exemption from corporate tax at the fund level provided the legal requirements are met.

The key difference from Ltd and PLC is tax opacity in Ireland combined with “tax transparency” at the investor level in their home jurisdiction, if local law so requires. In other words, ICAV taxation is structured as a neutral link between the assets and the unit-holders, where the tax base is formed at the investor level rather than at the fund, and withholding taxes and the ICAV are examined through the prism of DTTs and domestic rules. Such a structure is critical for private equity, credit strategies, hedge structures and multi-asset solutions where investors are geographically diverse.

Umbrella ICAVs and sub-funds: another practical plus. A single “umbrella” platform allows an unlimited number of segregated sub-funds with separate share classes, risk isolation and different investment mandates. The COREDO team has implemented such umbrellas for clients ranging from Singapore to Dubai, using a single ManCo and a unified infrastructure of the depositary, administrator and custodian while maintaining separate reporting for sub-funds.

ICAV tax architecture

Illustration for the section «ICAV tax architecture» in the article «Tax incentives for funds in Ireland – ICAV regime»
My main guideline is to minimize the fund’s tax burden through an ICAV without resorting to aggressive structures. Ireland allows a fund to be exempt from corporate tax when it has investment undertaking status and is correctly registered, and it also provides mechanisms for exemption from Irish withholding tax on payments to non‑residents from the “white list” of jurisdictions when supporting documentation is available. Taxation of gains from the sale of assets in an ICAV generally does not arise at the fund level; capitalization of gains is passed through to the investor taking into account their domestic tax regime and DTT.

Withholding and exemptions from taxes on interest and dividends themselves depend on the source of income and the location of the assets. In real projects we developed documentary withholding tax relief procedures, including investor self‑certification forms, confirmations of tax residency, analysis of treaty‑shopping risks and the application of the Multilateral Instrument (MLI), which modifies specific provisions of double taxation agreements. Our experience at COREDO has shown: a properly constructed matrix of DTTs and local exceptions on withholding tax on interest/dividends significantly increases net returns.

An ICAV should take into account the impact of BEPS and ATAD: interest limitation rules, CFC rules at the investor level, anti‑hybrid rules and substance over form — this is the baseline. Anti‑hybrid rules are important for debt strategies and structures with SPVs across multiple countries: mismatches in the tax characterization of instruments in different jurisdictions can lead to denial of deductions or double inclusion of income. We apply transfer pricing for groups of fund‑servicing entities and prepare transfer pricing documentation requirements for fund groups to demonstrate the arm’s‑length nature of fees charged by the ManCo, the administrator and advisors.

The introduced Pillar Two (global minimum tax) is formally aimed at large groups. Nevertheless, funds with controlled holdings and service hubs must check the per‑jurisdiction effective tax rate and exemptions. The solution developed at COREDO models ETR by jurisdiction and carve‑out scenarios; this is especially relevant when using portfolio SPVs for transactions in Europe, Asia and Africa. Additionally, we assess GAAR, general anti‑avoidance rules — in Ireland and in investors’ countries — to confirm business purpose and real economic substance.

VAT treatment of fund management services in Ireland provides for VAT exemption for fund management services, but where services are mixed in nature (for example, IT outsourcing or analytics) some components may be taxable. We pre‑classify contracts and determine VAT on management services: when VAT applies and how to correctly document administration fees — tax recognition and deductions for providers. Such analysis reduces the risk of margin shifting at the operational level.

What Revenue and the regulator see

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The tax residency test for a fund in Ireland is built around the place of effective management and management and control (management and control). Economic substance for an ICAV: it’s not just an office and a nameplate on the door, but a set of corporate governance practices: directors’ meetings in Ireland, independent non‑executive directors with relevant expertise, a local secretary, a record of resolutions, contracts with Irish counterparties and risk controls at the depositary and ManCo level. I always emphasize: it is demonstrable management and control at the ICAV that addresses CFC issues and confirms tax neutrality.

A calendar of board meetings held with an Irish quorum and minutes.
Real‑time access for directors to portfolio information and risk reports.
Local agreements with the ManCo, the administrator, the depositary, and auditors.
Policies and procedures: asset valuation, conflicts of interest, valuation challenge.
A dossier on the place of effective management: business trips, minutes, working correspondence.

The role of the manager (ManCo) and tax obligations is a separate topic. Licensing and registration of a ManCo for an ICAV is carried out at the Central Bank of Ireland, and the quality of the ManCo affects not only AIFMD/UCITS supervision but also the perception of substance by regulators. In several projects the COREDO team conducted ManCo vendor selection and built an advance pricing agreement (APA) as a tool for legal certainty on intra-group pricing for the service companies supporting the fund.

Requirements for directors and independent board members of an ICAV include a balance of competencies: investments, risk, compliance, audit. Functions and fiduciary duties and director liabilities in tax disputes are not theoretical: we have supported cases when correct escalation to the depositary and the recording of a director’s dissenting opinion helped a fund pass an inspection without sanctions. Corporate governance practices for an ICAV are your insurance when dealing with questions from the Irish Revenue Commissioners and external auditors.

Registration of CRO, Central Bank, Revenue

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A step-by-step guide to opening an ICAV for non-residents includes three tracks: legal (Companies Registration Office, CRO), regulatory (Central Bank of Ireland) and tax (Revenue).

CRO: preparation of the ICAV constitution, information on directors, the company secretary and the RBO. The Companies Registration Office (CRO) registration procedure for an ICAV usually takes 5–10 business days with a complete submission.
Central Bank of Ireland: submission of documents for ICAV approval and, where necessary, a UCITS prospectus or AIF rules. Timelines depend on the fund category: there are fast routes for QIAIF; for UCITS, 6–8 weeks with quality preparation.
Irish Revenue Commissioners: registration of the tax status as an investment undertaking and obtaining an Irish tax clearance certificate for certain operations (for example, on distributions).

How long does ICAV registration in Ireland take? On average “turnkey”, from 8 to 12 weeks, if the ManCo and key providers are selected in advance and there are no amendments to the strategy’s risk profile. The registration and launch timeline is a checklist that the COREDO team tailors to each strategy, including concentration rule compliance tests for UCITS compatibility and structural liquidity requirements.

Choosing a depositary, administrator and custodian: the foundation. The depositary controls ownership of assets and compliance with investment restrictions, and depositary liability: practical cases and risk management show that proper allocation of functions between the depositary and the administrator reduces operational risks. When structuring SPVs and ICAVs for private credit and securitisation SPVs we take into account asset segregation and tax asset protection mechanisms so that cash flows and payment priorities are resilient to stress scenarios.

Passporting AIFMD: opportunities and limitations for ICAV, and UCITS compatibility — this is about distribution strategy. UCITS provides the widest possible access to retail investors in the EU, AIFMD: to professional investors in Europe. The impact of Brexit on choosing Ireland as a fund jurisdiction is clear: Dublin has become the “gateway” for EU-passported products while retaining an English-language legal environment and depth of the service provider market.

Compliance and reporting: AML, DAC6, AEOI

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Anti-corruption KYC/AML for funds in Ireland is a set of policies, procedures and technologies. We build KYC/AML procedures when onboarding institutional investors, including sanctions screening and counterparty checks, identification of PEPs, adverse media and transaction monitoring. When suspicious transactions are detected there is an obligation to file SARs and reporting requirements for suspicious activity in accordance with Irish AML legislation.

CRS and FATCA for ICAV are standard. FATCA registration is required to obtain a GIIN, AEOI setup involves the technical steps for information exchange and annual filing through Irish ROS. Investor tax reporting requirements and forms depend on investor jurisdictions, but basic self-certification (W‑8BEN‑E/others) and periodic updates are mandatory. The Beneficial Ownership Register (RBO) and disclosures of the fund’s and ManCo’s ultimate beneficiaries must be accurate and timely.

DAC6 and reporting for ICAV funds is a sensitive area for cross-border transactions. We assess indicators of “arrangements” and prepare the reporting position to avoid late filing and penalties. The regulatory package (regulatory filings: the annual document package for an ICAV) includes filings to the Central Bank of Ireland, audit of financial statements, updating KIID/KID, as well as the tax reporting calendar: the main deadlines for funds taking into account the specifics of UCITS/AIF.

Choosing an auditor and audit requirements is not a formality. The auditor must understand valuation of Level 3 assets, NAV error escalation rules and the specifics of side pockets, otherwise the audit will be prolonged. The solution developed at COREDO provides an RfP process and a scorecard for auditors, administrators and depositaries taking into account the fund’s strategy, asset geography and investor requirements.

Redomiciliation of a fund to Ireland

Transferring a fund to Ireland: tax and operational steps begin with tax due diligence when entering an ICAV structure, analysis of BEPS issues during the reorganisation of international funds and review of CFC rules in investor jurisdictions. For assets we model transfer of assets in kind: tax consequences, possible stamp duties and capital gains recognition. Restructuring costs: how to account for expenses during a reorganisation – we record them in the fund’s accounting policy and with providers to avoid disputes over deductions.

ROI when moving the structure to ICAV mode is calculated through a set of KPIs: net return after withholding optimisations, savings on VAT and administration fees, speed of capital raising through passporting, reduction in compliance costs compared with offshore schemes. Key KPIs for managers when assessing ROI from redomiciliation include time-to-first-close, delta TER, % of investors from the EU, and the “cost of risk” from regulator audits. In practice, relocating to Ireland increases trust from LPs in Europe and Asia and simplifies cross-border distribution: tax barriers and solutions here are standardised.

Transition to ICAV: we mitigate compliance and tax audit risks through preliminary consultations with the Irish Revenue Commissioners, obtaining a tax clearance certificate where necessary, and via an APA for intra-group services. Risk mitigation strategies during tax audits and reviews include documenting the commercial purpose, comparability of ManCo fees and director independence. Practical steps to demonstrate substance to Revenue and the supporting evidence are documented in a ‘substance dossier’ with a calendar of meetings, minutes and correspondence.

Private strategies: PE/VC, hedge funds

ICAV for investment funds and hedge funds allows fine‑tuning of subscription/exit rules, hedge structures vs fund solutions and tax differences when using derivatives. For private equity we have embedded waterfall and carried interest within PE/VC fund structuring under ICAV: best practices suggest using separate sub‑funds for individual vintages and geographies to segregate risks and reporting. Tax aspects of private equity and ICAV often come down to managing capital gains treatment for non‑residents and investor‑level exemptions.

For credit strategies and securitisation SPV(s) we build a two‑tier architecture: an ICAV as the fund and an Irish or other EU SPV as the asset holder with its own “thin capitalization” and documented market rates. Such a setup supports asset protection through the ICAV and tax considerations, while preserving substance and the manageability of withholding. The COREDO team implemented credit umbrellas with sub‑funds for senior and mezzanine, as well as SPVs for synthetic securitisations, where anti‑hybrid rules were a critical part of the structuring.

We regularly compare the tax efficiency of the ICAV and Luxembourg fund schemes. In some cases Luxembourg wins for specific debt instruments and provider availability; nevertheless Ireland often offers a more direct tax neutrality, a simple operating model and a strong UCITS track record. choice of jurisdiction for the fund: Ireland vs offshore, for institutional LPs it is a question of trust and regulatory perimeter; Ireland with AIFMD/UCITS and supervision by the Central Bank of Ireland increases the quality of inbound due diligence by large investors.

Investor lifecycle: onboarding/holding/exit

At investor onboarding we set up KYC, the collection of self‑certifications for FATCA/CRS, tax residency checks and determine the applicability of withholding tax relief procedures and documentation. For US investors in an ICAV timely FATCA registration and the correct fund status for PFIC purposes at the investor level are critical; our experience at COREDO has shown that early engagement with their tax advisers reduces the risk of reporting surprises.

When making distributions it is important to consider withholding and exemptions on interest and dividends, apply DTTs and the relevant practical exceptions. Exit tax: modeling tax consequences on exit: a mandatory step at the subscription stage, especially for PE sub‑funds with a long horizon; investors should be able to see in advance scenarios for capital gains and possible exemptions, as well as investor tax reporting requirements and forms in their jurisdictions. We prepare clear memos on the tax treatment of distributions so the fund’s IR team can communicate transparently with LPs.

We discuss nominee arrangements and the related disclosure risks openly: in some jurisdictions nominee holders can complicate the application of DTTs and increase scrutiny from banks and depositaries. COREDO’s practice confirms: transparency of ownership structures and timely submission of data to the RBO reduce queries from administrators and auditors, thereby saving time and money.

Scalability, expenses and providers

Operating expenses of establishing an ICAV: forecasts and cost items include ManCo services, the administrator, depositary/custodian, auditor, legal support, listing (if required), directors’ insurance (D&O), IT infrastructure and KYC platforms. The cost of establishing and maintaining an ICAV depends on the strategy, liquidity and number of sub-funds; for an umbrella with two sub-funds and a professional ManCo we target a reasonable mid-market budget, which is detailed at the RfP stage.

Scalability: how the ICAV structure supports growth and capital raising – through an umbrella ICAV and sub-funds, passporting, unified policies, and a “live” ecosystem of Dublin providers. Tax incentives and opportunities for fund service providers in Dublin create competition and keep prices down, while service standards remain high. The COREDO team conducts KPI monitoring of administrators’ and depositaries’ SLAs, which directly affects NAV timing and the quality of investor reporting.

COREDO cases: EU, redomiciliation and taxes

Recently the COREDO team completed international fund redomiciliation cases to Ireland from offshore jurisdictions while retaining the investor base. We rolled out an umbrella ICAV with three sub-funds (public equities, private credit, Africa infrastructure), secured AIFMD passporting into key EU countries and coordinated cross-border distribution together with local counsel in Asia and Africa. Practical steps to demonstrate substance to Revenue and supporting evidence were incorporated into the corporate governance policy, and the Central Bank of Ireland approved the structure on schedule.

In another project our client was transferring a hedge strategy from a non-EU jurisdiction. After tax due diligence and analysis of BEPS issues we prepared an APA for the group’s service centre to close the transfer pricing risk. We also implemented sanctions screening and counterparty checks at the administrator level, and for DAC6 we developed an internal test preventing late reporting. Result – a fast first close and growth of the LP base from Europe and the Middle East.

Audit risks and their mitigation

Substance over form: the practice of tax audits in Ireland and the EU shows that formal indicia without real management in the country of residence no longer work. We help set meeting agendas, directors’ roles and ManCo control mechanisms to demonstrate the place of effective management. GAAR and anti‑hybrid rules are checked first; therefore profit allocation scenarios, SPV debt load and payment chains are documented in a memorandum before launch.

We discuss the impact of CFC rules on international investment structures with investors in advance, especially in Asia, where local CFC tests can bring the fund’s income into the tax base of the controlling persons. For such LPs we prepare individual certificates on the fund’s tax neutrality and the applicability of DTT, and also coordinate withholding tax relief procedures with their tax advisers. Regarding the Multilateral Instrument (MLI), we monitor updates to DTTs and promptly update self‑certification forms.

Why Ireland and ICAV now?

Choosing Ireland is a bet on the predictable supervision of the Central Bank of Ireland, the UCITS and AIFMD regimes recognized worldwide, and the infrastructure of world‑class service providers. Compared with offshore jurisdictions, investment status in the EU simplifies capital raising and reduces the compliance premium that investors often build into specific jurisdictions. For teams from Europe, Asia and the CIS this means process transparency, time savings and professional support at every stage — something COREDO handles daily.

The application of the ICAV regime in Europe, Asia and Africa in practice looks like a single platform with local SPVs to hold assets and a well‑designed DTT matrix. Our experience at COREDO has shown that with correct setup of substance and governance, ICAV withstands scrutiny by any institutional investor and auditor, and the ROI from redomiciliation is measured both by increased net returns and by the speed of fund closings.

Conclusions

ICAV is not just an “Irish form”, but a full-fledged operating platform: tax neutrality, the flexibility of umbrellas and sub-funds, oversight by the Central Bank of Ireland, passporting under AIFMD/UCITS, and predictable rules from the Irish Revenue Commissioners.

To obtain the full range of benefits — from exempting an ICAV from corporation tax to reducing withholdings and ensuring transparent AEOI reporting — it is important to link the legal, tax and operational axes into a single model of substance, governance and compliance.

The COREDO team has gone through this process with clients from the EU, Singapore, the UK, Cyprus, Estonia, the Czech Republic, Slovakia and Dubai and has built an approach that saves time and reduces risks. If you are considering registering an ICAV in Ireland, relocating a fund or optimizing an existing structure, I recommend starting with a roadmap: objectives, distribution strategy, tax model, providers, timeline, KPI.

The solution developed at COREDO makes it possible to combine strategic ambitions with operational delivery: from concept to first closings, without compromising on the quality of governance and investor trust.

Tax incentives for funds in Ireland the ICAV regime