Ireland is a prominent global jurisdiction for SPVs. It has an established infrastructure of expert service providers, a common-law system and a highly educated workforce. Furthermore, it is an onshore location and a member of the EU and OECD with a stable and transparent tax and political regime. These factors make it an attractive area to many investors.

Section 110 of the Tax Consolidation Act 1997 is at the core of Ireland’s structured finance regime. It governs the tax treatment of “qualifying companies’’, usually referred to as Section 110 companies. A Section 110 company qualifies for the benefits of Ireland’s extensive double tax treaty network of over 70 countries worldwide. Transactions in a Section 110 company can be structured to be tax neutral; it can reduce or eliminate withholding taxes on income flows and capital gains.

To qualify as a Section 110, the following criteria must be met throughout the life of the entity:

• The company must be an Irish resident.
• It must carry on business in Ireland.
• It must not carry out activities other than those ancillary to its business.
• It must acquire/create/hold ‘’qualifying assets’’ and the market value of these assets on the date of acquisition must be at least €10 million.
• Transactions must be at arms-length.
• It must notify the Revenue Commissioners of its intent to be a Section 110 qualifying entity.

Qualifying assets include financial assets, commodities, plant and machinery.

Section 110 SPVs are used by investment banks, investment funds, insurance companies, aircraft and ship-leasing businesses to manage risk and to issue debt securities or loans secured over assets held by a Section 110 entity, which is bankruptcy remote. Moreover, Section 110 entities can also be used in structured finance, securitisations, RMBS/CMBS, CLOs, aircraft leasing and insurance/reinsurance, to name a few.

There are no special tax rulings or authorisations required from any regulatory body and the tax authorities for the establishment of a Section 110 entity in Ireland. However, they are subject to local Irish company law requirements including (i) the annual filing of audited financials with the Companies Registration Office and (ii) the filing of quarterly and annual statistical returns with the Central Bank of Ireland.

To find out how Bolder Group can help you with the incorporation, ongoing maintenance and compliance of a Section 110 entity, please contact our expert-led office in Ireland.

Contact Bolder Group’s Head of Governance Ireland at terri.hamill@boldergroup.com.