Article 5 of the UCITS IV Directive provides that UCITS funds may be managed by an authorised fund manager resident in an EEA member state other than the home state where the fund is established and regulated. For this purpose the EEA includes member states of the EU together with Norway, Iceland and Liechtenstein; it does not, however, extend to Switzerland.

The Management Company Passport (MCP) will therefore apply to collective investment schemes established and regulated in an above EEA member state.

In Budget 2011 the UK Government following consultation on the transposition of UCITS IV introduced a tax relieving measure to cover an offshore UCITS IV fund managed by a UK fund manager. This measure maintains UK competitiveness in the asset management industry by ensuring that there will be no adverse tax consequences in the UK when a foreign UCITS fund appoints a manager resident in the UK for tax purposes. Under current case law some foreign funds may be held to be tax resident in the UK when centrally managed and controlled here
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The measure provides legislation to treat offshore UCITS funds as not being resident in the UK for tax purposes in cases where they might otherwise be resident by virtue of the activities of the UK fund manager. The proposed legislation has been included in the Finance Bill 2011 and will come into effect upon Royal Assent.