Key Features of Irish SPVs in Structured Finance and Securitisation

Ireland has firmly established itself as a leading jurisdiction for the incorporation of Special Purpose Vehicles (“SPVs”). This reputation is underpinned by the jurisdiction’s robust legal framework, favourable tax regime and sophisticated professional services infrastructure, all of which have contributed to the sustained expansion and diversification of the Irish SPV market. A variety of structuring options exists, each with distinct legal and operational characteristics that support different transaction types. Understanding these features is central to appreciating Ireland’s position in global securitisation.

As of year-end 2024, Ireland was home to 4,456 active SPVs, with an estimated asset value of €1.142 trillion. Securitisation vehicles are the most populous, accounting for 37.5% of all SPVs and a striking 57.6% of total SPV assets. The sector has seen robust growth, with the number of securitisation SPVs increasing by 26% over the past two years.

Legal Forms of Irish SPVs

Irish SPVs are generally incorporated under company types provided for in the Companies Act 2014. These forms offer features such as ring-fencing of assets, limited recourse provisions, bankruptcy remoteness and access to Ireland’s extensive double taxation treaty network, attributes that make them particularly suited to structured finance and securitisation.

The three principal company types used for SPVs are set out below.

Key Features of Irish SPVs

A key feature of Ireland’s securitisation regime is the availability of the Section 110 tax treatment under the Taxes Consolidation Act 1997. This regime provides a competitive and transparent framework for qualifying SPVs, commonly referred to as “Section 110 companies.” To qualify, the SPV must be tax resident in Ireland and acquire or create qualifying assets that are managed within the jurisdiction. It must also satisfy the “Day-One” test, which requires the market value of those assets to be at least €10 million on the date of acquisition. Activities must be restricted to the company’s business and the Irish tax authorities must be formally notified of its qualifying status. In addition, all arrangements, other than Profit Participating Notes, must be entered into on an arm’s-length basis. Meeting these requirements provides access to Ireland’s favourable tax regime within a transparent and internationally recognised framework.

Beyond tax efficiency, structural integrity is a defining feature of Irish SPVs, achieved primarily through bankruptcy remoteness. This is typically implemented via an orphaning arrangement, under which the SPV’s shares are held by a charitable trust, insulating the vehicle from the insolvency of any parent or sponsor entity. In addition, contracts are generally executed on a limited recourse and non-petition basis, providing further protection for investors and reinforcing the independence of the structure.

Flexibility is another defining characteristic of the Irish SPV framework. Many vehicles are established as multi-series issuers, enabling the issuance of separate tranches of debt backed by distinct asset pools. While Ireland does not provide statutory segregation, contractual segregation is widely accepted by rating agencies and market participants as an effective mechanism. This approach has supported the growth of multi-issuance structures, which now account for approximately 3.7% of all SPVs and 7.0% of SPV assets.

Market Structure, Regulatory Landscape and Operational Advantages of Irish SPVs

Irish securitisation vehicles are highly diverse, with several distinct subcategories reflecting the breadth of activity in the market. Collateralised Loan Obligations represent the largest segment, accounting for 18.9% of all SPVs and 20.5% of total assets. Asset Backed Securities make up 2.7% of SPVs and 6.7% of assets, while Residential Mortgage-Backed Securities comprise 1.9% of SPVs and 4.4% of assets. Receivables funding vehicles, which facilitate the securitisation of trade and other receivables, account for 2.3% of SPVs and 3.2% of assets. Other notable structures include Asset Backed Commercial Paper at 1.6% of SPVs and 7.8% of assets, Credit Linked Notes at 1.4% of SPVs and 0.7% of assets and Non-Performing Loan Securitisation vehicles, which represent 0.8% of SPVs and 2.3% of assets.

Given this complexity, Irish SPVs typically fall within the scope of various EU regulations, including the Securitisation Regulation, Prospectus Regulation and Market Abuse Regulation, depending on the nature of their activities. For transactions involving public issuance, listing on Euronext Dublin is a common choice, offering efficient turnaround times and broad recognition across the EU, UK and US markets.

From a practical perspective, the Irish SPV regime offers several operational advantages. SPVs can be incorporated with minimal share capital requirements, often as low as €1 for Designated Activity Companies (DACs) and are not subject to thin capitalisation rules or minimum profit retention requirements. Portfolio management and administration services supplied to Section 110 SPVs are exempt from Irish VAT and no stamp duty is payable on the issue or transfer of notes. Incorporation is typically completed within five business days, with statutory requirements including the appointment of EEA resident directors, a company secretary and the maintenance of a registered office.

Conclusion

Irish SPVs have become a cornerstone of structured finance and securitisation transactions, owing to their combination of legal certainty, tax efficiency, and structural flexibility. Features such as Section 110 qualification, bankruptcy remoteness through orphaning, and the ability to issue multi-series debt provide sponsors and arrangers with a robust and internationally recognised framework. When properly constituted, these vehicles deliver transparency, investor protection, and operational efficiency, attributes that have cemented Ireland’s reputation as a leading jurisdiction for securitisation structures.

How We Can Help

Through our team of highly competent and experienced practitioners, we offer the full range of services required for the establishment, operation and management of SPVs. We are committed to providing an outstanding level of service. We only appoint experienced directors with relevant knowhow and expertise to manage our portfolio of SPVs. Our specialist compliance and accounting teams ensure that corporate governance and financial administration and reporting are carried out to the highest standards. Through careful monitoring and diligent application, we ensure that all SPVs are fully compliant with all applicable laws and regulations. Working extensively with the originators of securitised assets, financial institutions, investment managers, arrangers, trustees, investors, collateral managers legal and tax counsel and regulators, we offer a comprehensive suite of services that can be tailored to meet the specific requirements of each transaction to offer the best solutions for your business’ needs.

For more information on the above, or to find out how Cafico International can assist your business, please contact Niamh Manning.

References:
All statistics and factual statements are sourced from the IDSA Report: Activities of Irish SPVs, June 2025.