A Special Purpose Vehicle or an SPV
is a corporate entity used by a parent company for independent ownership,
management, and funding, as well as protection of its projects from operational
For example, in the event of
bankruptcy, an SPV secures obligations of the parent company. This legal
function is defined by a specially designed asset/liability structure.
Typical SPV uses include:
Securitization – can be used by an
originating party to securitize loans or other receivables by creating an SPV,
which purchases these assets by issuing debt, secured on their underlying
Real Estate – used to acquire title
to real property and limit resource of mortgage lenders depending on the
location of the asset.
Financing – used to ring-fence investments,
permitting financing without increasing the debt level of the parent company
and/or exposing its assets to cross-liabilities.
Asset transfer – Can be used to
transfer assets along with associated material agreements, which may permit the
transfer of all or part of the ownership of the enterprise while keeping intact
material agreements, which may be necessary to maintain the value of the asset.
Risk sharing – Can be used to raise
capital at favorable rates in certain situations, with creditworthiness
determined by the available collateral of the SPV, rather than the credit
rating of the parent company.
IP – Used to separate valuable IPs into a standalone SPVs that have minimal liabilities and to raise funds and enter into license agreements with third parties.
Abu Dhabi Global Markets SPVs – Setup Benefits
The ADGM SPV regime is designed and
implemented as a flexible, robust, simple and cost-effective solution for
businesses, seeking to improve their operational and financial structure.
Transparent fee structure and efficient due diligence process make ADGM a
preferred jurisdiction choice for those with SPV requirements.
One of the main benefits of an SPV
with Abu Dhabi Global Markets is an option to register a ‘Restricted Scope
Company’ SPV where public disclosure is limited (available to those clients who
meet certain criteria).
The ADGM SPV regime is underpinned by
ADGM’s international legal and regulatory platform, its independent courts with
outstanding legislation and common law* judges, and a favorable tax
In addition, ADGM allows the use of
an agent/ corporate service provider to manage the SPV and to provide the
registered office address, eliminating the need to have a physical office
Looking to find out more about SPV, and how it may be useful for your own business?
Adam Global is a name that stands for excellence, commitment, and providing a holistic approach to set-up business in UAE since 2002. The company operates with the help of more than 20,000 people in its global network.
To receive a free consultation on quick and easy foreign company branch setup, feel free to contact Adam Global Consulting and we will assist you with all your business concerns.
Call:- +971 50 358 7945
We are happy to assist!