21 Jan 21

Irish Investment Limited Partnerships (ILPs)

On 23 December 2020, the Investment Limited Partnerships (Amendment) Act, 2020 (the 2020 Act) was enacted into Irish law. The new legislation modernised the regulatory framework with regard to Investment Limited Partnerships (ILPs) as laid out in the Investment Limited Partnerships Act, 1994. There were relatively few ILPs formed under the previous regime, owing to the fact that the structures had a number of characteristics which rendered them unsuitable commercially. The new updated legislation offers a range of structuring solutions for the private equity, private credit, real assets, infrastructure and other private funds market and brings the Irish legislation in line with other jurisdictions. The new framework also aims to support Ireland’s development as a global centre for private equity funds as per Ireland for Finance: Strategy for the development of Ireland’s international financial services sector to 2025.

An ILP is a common law partnership regulated by the Central Bank of Ireland (CBI) as an alternative investment fund. ILPs are either established as a Qualifying Investor Alternative Investment Fund (QIAIF) or a Retail Investor Alternative Investment Fund (RIAIF), with the former being the more common structure used to date.

Irish Funds estimates that the changes implemented as part of the Investment Limited Partnerships Act will have a significant positive effect on the industry, including the creation of up to 3,000 new jobs by 2025 and attracting up to €20 billion a year in capital to the region.


An ILP is established and governed by a partnership agreement between at least one general partner (GP), and at least one limited partner (LP). The ILP itself does not have a separate legal personality, but rather the general partner is authorised to enter into contracts on behalf of the ILP.

ILPs are particularly suitable for collective investment funds. Collective funds can also be established under a corporate structure such as an Irish Collective Asset-management Vehicle (ICAV). Unlike an ICAV, an ILP is not incorporated but rather all assets and liabilities belong jointly to the partners, as per the limited partnership agreement (LPA).

Amendments to the LPA can be made without regulatory approval by majority approval from GPs and majority approval from LPs. The 2020 Act removed the requirement for unanimous written approval from the LPs.

Establishment of a ILP is subject to approval of the CBI, and regulatory oversight in accordance with the Central Bank’s AIF Rulebook. An ILP is established once a certificate of authorisation has been issued by the Central Bank.

General PartnerLimited Partner
Responsible for the management, control, and operations of ILP.No limit in terms of number.
Enters into contracts on behalf of ILP.Not liable for ILP’s debts or obligations other than their investment.
Liable for debt and obligations.If an LP takes part in the management of the ILP, they may lose the benefit of limited liability. The 2020 Act has clarified and broadened the activities which LPs can undertake without being at risk of losing their limited liability status.
Does not need CBI approval as an AIF management company but is subject to the fitness and probity regime.Can have some limited involvement with some of the activities of the ILP in an advisory capacity.

The 2020 Act allows for an ILP to adopt an umbrella structure, with multiple segregated liability compartments or “sub-funds” created within the one entity. The umbrella structure is attractive because it allows separate strategies or investor types to be accommodated in different sub-funds of the same umbrella rather than having to establish stand-alone partnerships for each.


The 2020 Act provides for the redomiciliation of ILPs in and out of Ireland. GPs of partnerships in recognised jurisdictions may apply to migrate to Ireland. Migrating partnerships may apply to the CBI to be registered as an ILP in Ireland by way of continuation.

Regulatory Framework

ILPs fall within the AIFMD regime, and as such may avail of marketing passports and associated investor protections. ILPs are typically established as Qualifying Investor AIFs (QIAIFs) which are not subject to regulatory restrictions with respect to borrowing or investment. QIAIFs can also avail of the CBI’s fast-tracked approval process, under which the constitutional and main offering documents need only be filed the day before approval is required.

In the case of RIAIFs, documentation must be submitted to the CBI for review and comment.

In terms of their liability profile, both QIAIF and RIAIF structures can be open-ended limited liability or close-ended.

ILPs are not subject to legal risk spreading obligations, making them suitable for single asset funds or funds with highly concentrated positions.

The 2020 Act also extends the AML beneficial ownership disclosure requirements with respect to ILPs, bringing them into alignment with existing framework for companies, trusts and ICAVs.

Beneficial Owner: any individual who (a) ultimately is entitled to or controls, whether the entitlement or control is direct or indirect, more than a 25% share of the capital or profits of the partnership or more than 25% of the voting rights in the partnership, or (b) otherwise controls the partnership.


ILPs are tax transparent structures and generally will not be taxed at a fund level or on distributions to partners. Any income or gains made by the fund will be treated as accruing to partners. For Irish resident GP’s, Ireland's 12.5% or 15% corporate tax rate applies.

ILPs are not eligible to benefit from Ireland’s network of double tax treaties. Investors can, however, claim benefits within their own jurisdictions, if different from Ireland. ILPs are subject to the VAT exemption applied regulated funds in Ireland.