Germany

Key Figures

Number of Irish Funds Registered for Sale in Germany

Market Overview

Germany is the second largest market for the distribution of Irish funds. The number of Irish funds distributed to Germany increased by over 65% from 2013 to 2017.

The German fund industry is the biggest in Europe, and has grown by 2.9% in terms of assets under management in the 12 months ending in December 2014.

The industry's assets amounted to €2,382bn by the end of 2014 and…

Germany is the second largest market for the distribution of Irish funds. The number of Irish funds distributed to Germany increased by over 65% from 2013 to 2017.

The German fund industry is the biggest in Europe, and has grown by 2.9% in terms of assets under management in the 12 months ending in December 2014.

The industry's assets amounted to €2,382bn by the end of 2014 and net inflows recorded during the first half of 2015 accounted for €109bn (2014 annual inflows amounted to €116bn). Spezial-AIF attracted inflows of 70bn and retail funds of 43bn.

From the beginning of the year to the end of June 2015 assets under management grew by almost 8% to around €2,6tr, the majority of which was managed by fund companies in Spezialfonds (1,3tr) and retail funds (877bn).

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Tax Considerations

In Germany the tax treatment for German investors is significantly better if they are investing in a transparent fund (i.e. a fund that has met the local German tax reporting obligations). For this reason most potential German investors require funds to have transparency status. In order to achieve tax transparency status the fund must satisfy various filing and reporting requirements, which include local publication requirements…

In Germany the tax treatment for German investors is significantly better if they are investing in a transparent fund (i.e. a fund that has met the local German tax reporting obligations). For this reason most potential German investors require funds to have transparency status. In order to achieve tax transparency status the fund must satisfy various filing and reporting requirements, which include local publication requirements and obtaining a certificate from the German tax authorities that the fund’s German tax reporting is in compliance with German tax law.

Tax information must be certified by a tax auditor and published in the German electronic federal gazette within four months of the financial year end. In addition to annual reporting Germany requires daily reporting for certain parts of the fund’s income.Funds which fulfil the complete range of annual and daily reporting requirements are regarded as tax transparent. The consequence of being labelled non-transparent negatively impacts the tax treatment of German resident investors.

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Video

Lorcan Murphy (Director, Brook Green Capital) gives tips for managers considering setting up in Europe.

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