Executive Summary:

Ireland has become a leading exchange-traded fund (ETF) domicile thanks to its early move into cross-border funds and the ecosystem it built around fund structuring and tax treaties. The nation set up the Irish Financial Services Centre in 1987 and adopted the Undertakings for Collective Investments in Transferable Securities (UCITS) Directive in 1988, shortly after Luxembourg. Over the past four decades, it has leveraged this head start to develop deep legal, tax, servicing, and operational capabilities alongside stable, flexible regulation and efficient operations that enable cross-border ETF distribution.

As regulatory changes allow wider swaths of investors in Europe to enter more fund structures, savvy asset managers would do well to examine the advantages of domiciling ETFs in Ireland. This paper examines the historical rise of active ETFs and the particular benefits Ireland offers from a cross-border fund perspective for issuers looking to build out ETF wrappers. 

Irish Entrance: A Historical Lens

Since their debut in North America in the early 1990s, ETFs have attracted investors on account of their low costs, tax efficiency, transparency, and intraday tradability. Ireland launched its first ETF in 2000. ¹

Product innovation accelerated with smart beta and factor-based products arriving in the mid-2010s, further boosted by the SEC’s 2019 Rule 6c-11 (ETF Rule), which made custom baskets easier to build and supported active ETFs.

Today, ETFs span sophisticated active and complex strategies: active products made up 37% of new EMEA ETF launches in 2025,² and Ireland—home to 96% of European active ETF AUM³—has been central in meeting that demand. Given its favorable tax and regulatory framework and deep service-provider ecosystem (Securities Services, legal firms, and management companies), Ireland is a hard-to-ignore ETF domicile for issuers.

The Irish Advantage

Ireland is Europe’s de factor ETF domicile of choice, hosting some 70% of European ETFs⁴ (vs. 21% in Luxembourg⁵) and 78% of European ETF AUM.⁶

While passive ETFs still constitute more than 96% of Irish-domiciled ETF AUM,⁷ active ETFs are a key growth engine: Ireland domiciles 85% of Europe’s active ETF structures and 96% of active ETF AUM, along with capturing 94% of 2025 net flows as of Nov 21, 2025.⁸

Ireland’s appeal is reinforced  by tax and regulatory advantages (including broad double-tax treaties and a 15% U.S. dividend withholding rate for qualifying Irish ETFs), no subscription tax, a 12.5% corporate tax rate (vs. 25% in Luxembourg), and flexible structures that support more complex strategies (including full collateralized loan obligation exposure⁹ and, since April 2025, semi-transparent ETFs with quarterly holdings disclosure¹⁰).

A 2025 CBI clarification also highlighted the regulatory approach to the creation of listed ETF share classes within mutual funds (without the UCITS ETF label at sub-fund level),¹¹ creating additional market entry points—though uptake has been limited and can have U.S. equity tax considerations. Recent U.S. filings for private credit/private equity ETFs signal growing demand for innovative wrappers, which could benefit Ireland if replicated in Europe.

The Luxembourg Allure

Despite Ireland’s dominance in the ETF realm, Luxembourg is strategically positioning itself to capitalize on the growing trend of active ETFs. Luxembourg, with $623 billion¹² in ETF AUM as of year-end 2025 and slightly more than a fifth of all European ETFs.¹³ Luxembourg is angling for greater market share: its financial center development agency, Luxembourg for Finance, has even instituted a catchy tagline: “Luxembourg is where ETFs go to work.”

Luxembourg’s Advantages:

• Comprehensive double taxation treaties with 92 countries¹⁴
• Established fund infrastructure and financial ecosystem, with no significant start-up costs for ETFs
• The ability to use “synthetic replication” structures to mimic U.S. ETFs through a swap agreement with a counterparty without purchasing underlying securities.¹⁵
• The discontinuation of levying a subscription tax on active ETFs in Luxembourg, effective Jan. 2025 (an exemption already in place for passives)¹⁶
• The promotion of a fast-track approval process for ETFs from Commission de Surveillance du Secteur Financier (CSSF) in certain circumstances ¹⁷
• The ability for UCITS vehicles, especially Sociétés d’investissement à Capital Variable (SICAVs), to establish ETF share classes within existing mutual fund structures, subject to CSSF requirements

Facilitating ETF Creation

Launching ETFs in Ireland or Luxembourg requires specialized servicing to meet complex regulatory and operational demands.

J.P. Morgan combines global scale with deep Ireland and Luxembourg regulatory expertise, innovative technology, and an end-to-end platform—supported by an investment bank that also acts as an authorized participant (AP) and market maker for exchange-traded products. Asset managers can access integrated market making, primary origination, and fund servicing, plus Fusion by J.P. Morgan for cloud-native analytics and reporting. A dedicated ETF team across Sydney, Dublin, and Boston provides hands-on support across the trade lifecycle to help optimize execution and outcomes.