UAE is a leading commercial hub for all types of business. Startups to corporate giants benefit from their presence in the UAE.
The government allows entrepreneurs to start holding companies apart from traditional business models. The SPV or Special purpose vehicle is such a holding company that allows owners to limit their liability and isolate financial risks. ADGM ( Abu Dhabi Global Market) and Ras Al Khaimah international corporate center (RAK ICC) offers the SPV legal structure.
What is SPV?
SPV is a special purpose vehicle or special purpose company or special purpose entity. It’s a business entity used as a subsidiary if the company undergoes bankruptcy. SPV is used as finance or to buy or sell assets that often resemble an off-balance sheet limiting your liability and reducing the financial risk. ADGM or DIFC allows you to set up an SPV company in the UAE.
Advantages of setting up SPV company through ADGM
ADGM provides a flexible and cost-effective SPV structuring asset holding and investments. The regime provides business owners the freedom to separate their financial and legal risks. As per the direct application of English common law, SPV companies follow company regulations that ensure consistency across all corporate vehicles.
Some of the features of ADGM SPV companies,
What are the uses of ADGM SPV company?
SPV company is normally used to hold shares in other companies. Some of the key uses of ADGM SPV company,
SPVs allow companies to legally isolate their financial risk. SPV is used as a project company for joint ventures that reflect the management responsibilities but isolate the partner’s risk associated with the venture.
SPV can be used to achieve financing without increasing the actual debt of the company. SPV allows investors to invest in any specific projects where the parent company is not allowed to invest directly.
SPV companies are used to acquire properties. If the tax on the property is higher than the capital gain, then instead of the property, you can sell the SPV and then pay tax on capital gains.
Few assets are difficult to transfer, thus a parent creates SPV to own these assets. If they wish to sell, SPV sells it as a self-contained package.
How to set up an SPV company?
The SPV company setup through ADGM is digital and accomplished via the ADGM portal online registry.
The ADGM doesn’t require direct visits or submission of hard copies during the company setup process.
Steps for ADGM SPV company setup,
Start your SPV company with NHBC business setup consultants
SPV company keeps your business secure from financial risk. We help you start your SPV company with very few steps. By reducing the complexity, we leverage the best business setup solutions in the UAE.