knowledge 15 July 2026 |

Limited Partnership Reform: A further step in enhancing Ireland’s attractiveness as a funds domicile for private funds

Overview

On 7 July 2026, the Department of Enterprise, Tourism and Employment (“DETE”) published a public consultation on targeted reforms to the Limited Partnerships Act 1907 (the “1907 Act”).  The proposed changes, which are expected to be incorporated into the Miscellaneous Provisions (Registration of Limited Partnerships and Business Names) Bill 2024, will enhance Ireland’s competitiveness as the EU fund domicile of choice for private funds, in addition to having positive implications for the structuring of private capital more generally in Ireland.

Why This Matters for Private Funds

Ireland's funds industry has experienced remarkable growth, with net assets of Irish-domiciled funds recently exceeding €5 trillion.  The private capital segment in particular has been a key driver of growth, with the Irish government's Fund Sector Review 2030 identifying private assets as a priority area for the continued development of the investment landscape in Ireland. While to-date, the Irish Collective Asset-management Vehicle (“ICAV”) and the Investment Limited Partnership (“ILP”) have been the vehicles of choice for Irish domiciled private fund strategies (e.g., private equity, VC, real estate, private credit and infrastructure), both the ICAV and ILP are regulated fund vehicles.  In contrast, the 1907 Act limited partnership is an unregulated fund vehicle (although as an AIF, it is still subject to AIFMD) and so this proposed reform to the 1907 Act limited partnership vehicle is a further enhancement of the ‘toolkit’ that is now available in Ireland to facilitate private fund structuring. In its consultation, DETE has explicitly stated that the objective of these reforms is to improve Ireland's competitiveness as a location for investment structuring, reduce reliance on foreign partnership vehicles, and ensure that investment activity is conducted within Ireland's transparency and regulatory framework.   

The Three Reform Proposals

1. Increasing the Maximum Number of Partners

The current statutory maximum of 20 partners (subject to certain exceptions) is proposed to increase to 149, aligning it with the maximum membership permitted for private companies limited by shares under Irish company law. This reform would eliminate both the uncertainty for private fund managers when seeking to anticipate the number of investors that may invest in their private fund, and the administrative burden and cost that may be associated with creating parallel partnership structures in order to accommodate larger investor pools.

2. A Statutory Whitelist of Permitted Activities

Under the existing regime, and as with most partnerships, a limited partner will lose its limited liability status if the limited partner takes part in the management of the partnership.  There is no uniform definition of what constitutes ‘taking part in the management of the partnership’ and this uncertainty has long been a concern for institutional investors and private fund managers. DETE proposes to introduce a statutory whitelist of activities that limited partners may undertake without being deemed to participate in management, potentially including the approval of key partnership decisions, advising or consulting with the general partner, voting on specified matters, and/or acting in certain structural roles. A similar whitelist already exists for the ILP under Irish law, and comparable provisions operate in the UK, Luxembourg and Delaware. This reform will bring the 1907 Act limited partnership into line with international best practice and provide the legal certainty that sophisticated investors expect, and private fund sponsors need, within a private fund structure.

3. Flexibility on Capital Withdrawal

The current rule that a limited partner's capital contribution cannot be withdrawn during the life of the partnership without impacting the limited liability status of the limited partner is rigid by international standards. DETE proposes to introduce a controlled mechanism for the withdrawal or adjustment of capital, subject to certain solvency requirements, creditor protection measures and appropriate disclosures. This reform would significantly enhance the flexibility of 1907 Act limited partnerships for investment structuring purposes.

A Further Step Along the Road for Irish Private Funds

These reforms sit within a wider programme of measures to bolster Ireland's position in the private capital space. Not only did the Irish government's Fund Sector Review 2030 identify private assets as a priority area for the continued development of the investment landscape in Ireland, the Central Bank of Ireland's recent modernisation of the AIF Rulebook and the recent (and anticipated) fund-related tax reforms to incentivise Irish-residents to invest in Irish domiciled funds further support the wider reform that is taking place within the private funds sector in Ireland, making Ireland an increasingly attractive domicile for private funds. 

Responding to the Consultation

The closing date for submissions is Friday, 14 August 2026. We are engaging actively with this consultation process and would welcome the opportunity to discuss with clients and contacts how these reforms may affect existing and planned fund structures.

McCann FitzGerald LLP is one of Ireland's premier, full-service law firms and our Investment Management Group is consistently recognised as a market leader in asset management and investment fund structuring. We have always been at the forefront of reforms impacting Irish funds, whether it be the development of the ICAV, Ireland's bespoke corporate vehicle for investment funds, or the modernisation of the Irish ILP.  We welcome DETE’s proposed reforms to the 1907 Act and we would encourage all stakeholders to respond to the submission in advance of 14 August 2026.

For further information, please contact a member of our Investment Management Group.