How to start an SPV ( Special purpose vehicle) company in the ADGM?

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?

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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.

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Advantages of setting up SPV company through ADGM

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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. 

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Some of the features of ADGM SPV companies, 

• The quick and effective setup process with NHBC consultants
• Cost-effective fees and transparency 
• No physical office is required based on the appointed agent
• Apply for a tax residency certificate and get the advantages of UAE’s double tax treaty network.
• Various legal structures
• Any number of shareholders
• Common law jurisdiction
• Separate regulatory framework
• ADGM courts

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What are the uses of ADGM SPV company?

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SPV company is normally used to hold shares in other companies. Some of the key uses of ADGM SPV company,

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• Risk sharing

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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. 

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• Financing

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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. 

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• Real estate investment

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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. 

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• Asset transfer

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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. 

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How to set up an SPV company?

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The SPV company setup through ADGM is digital and accomplished via the ADGM portal online registry. 

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The ADGM doesn’t require direct visits or submission of hard copies during the company setup process. 

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Steps for ADGM SPV company setup,

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• Create a profile in the portal and prepare the documentation required for the application. Also, include a business plan with structure, purpose, and shareholders.
• Complete the application form and submit it with the necessary documents and payment. 
• Complete the documentation within a few days and check for the status of your application through the portal dashboard. They will update via email in case of any changes required in the application. 
• Finally, after a successful application, you receive a soft copy of the license. You get an email to fix the appointment to receive the original documentation. 

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Start your SPV company with NHBC business setup consultants

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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.

please call us at +971 58 500 8643 or email us at [email protected] and we will get back to you at the earliest.