IRELAND Law and Practice Contributed by: Diarmuid Mawe, Craig Kenny, Katelin Toomey and William Fogarty, Maples Group
Designated activity company (DAC) An Irish company may also be formed as a DAC, which is a private limited company. The constitution of a DAC comprises a memoran - dum of association and articles of association. The memorandum of association sets out the objects of the DAC, and the DAC can do any act or thing stated in the objects. PLC A PLC is another type of Irish company, under which the liability of members is limited to the amount, if any, unpaid on shares held by them. Similar to a DAC, the constitution of a PLC comprises a memorandum of association and articles of association. The memorandum of association sets out the objects of the PLC, and the PLC has the capacity to do any act or thing stated in the objects. 5.3 REITs A REIT is a type of Irish PLC aimed at facilitat - ing collective investment in real estate. The con - stitution of a REIT comprises a memorandum of association and articles of association, with provisions typical of an Irish PLC. The articles of association will impose certain restrictions and obligations on the shareholders of the company to enable the company to qualify as an Irish REIT. REITs are not commonly used in the Irish real estate market; see 5.1 Types of Entities Avail- able to Investors to Hold Real Estate Assets for further details. 5.4 Minimum Capital Requirement There is no mandatory minimum capital require - ment for Irish private companies. The Central Bank (CB) does not apply a mini - mum capital requirement for QIAIF ICAVs, which are externally managed by an alternative invest -
posals of assets of its property rental business. A REIT must be in operation for a minimum of 15 years in order to avoid any latent capital gains tax exposures when it ceases to be within the regime. REITs are not commonly used in the Irish market, where just one remains. QIAIFs/ICAVs Institutional investors historically used Quali - fying Investor Alternative Investment Funds (QIAIFs) to acquire Irish real estate. QIAIFs are most commonly established as Irish Collective Asset-management Vehicles (ICAVs). Previously, ICAVs offered investors some tax advantages, but this has changed as they are now subject to a 20% withholding tax on profit distributions to investors and are exposed to a deemed income tax charge of 20% if they have debt costs above certain thresholds. As a result, ICAVs have not been as popular for Irish real estate investment in recent years. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity ICAV The ICAV is a corporate vehicle similar to an investment company and may be structured as an umbrella fund with segregation of liability between sub-funds. The Instrument of Incorporation is the ICAV’s constitutional document. Unregulated Structures Private company limited by shares (LTD) An LTD is a simplified entity that has the capac - ity of a natural person. The constitution of an LTD comprises one document. The LTD does not have an objects clause and has full unlimited capacity to carry on any legal business, subject to any restrictions in other legislation.
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