SPV (Special Purpose Vehicle) companies are separate legal entities created for people who are interested to purchase Buy to Let (BTL) properties. It has its own assets and liabilities, and legal status as well. The other uses of these types of companies include handling the transfer of any type of asset or loan to an existing business. However, the prime objective of setting up an SPV company is to isolate financial risk. For instance, if the parent company goes insolvent, the SPV can still continue with its operations. Thus, it is a “bankruptcy-remote entity”.
2. The growing popularity of the UAE as a leading commercial
hub makes it an ideal location for all types of businesses.
From freelancers, startups, and microbusinesses to
corporate giants like Google & Microsoft, all benefit from
their presence in UAE. Apart from the traditional business
models, the UAE has several holding companies, which
allow entrepreneurs to hold their assets while running their
businesses. The SPV company set up is one such structure.
Special Purpose Vehicle (SPV) is a holding company which
allows owners to limit liability and isolate their financial
risks. The Abu Dhabi Global Market (ADGM) as well as Ras Al
Khaimah International Corporate Centre (RAK ICC) offer this
form of legal corporate structure.
Read on below to get an in-depth guide to ADGM SPV
company formation. Check the key features of SPV
company set up where you can conduct your business
operations effortlessly.
3. The Abu Dhabi Global Market (ADGM) is the first
International Financial Free Zone in the Middle East where
the English Common Law applies. The principles of the
English Common Law ensure a strict adherence to global
business standards. It also includes benefits like ensuring
certainty of proceedings along with the backing of English
courts
Registration Authority (RA)
Financial Services Regulatory Authority (FSRA)
ADGM Courts
ABOUT ABU DHABI
GLOBAL MARKET (ADGM)
4. You can establish Special Purpose Vehicles (SPVs) company set up as subsidiaries, special
projects or even as a joint venture vehicle. Since SPVs have a separate legal personality, creditors’
claims cannot attach to the SPV’s shareholders’ or any of the sister companies’ assets.
The biggest benefit that an ADGM SPV company formation offers to business owners and asset
holders is freedom of separation of financial and legal risk. However, that is not all
Benefits of ADGM SPV Company Set Up
5. Structured
finance system
Companies can access a financial
instrument wherein they can
restructure debt, raise capital, transfer
their assets as well as manage risk
when setting up a SPV company.
These issues are not addressed in
conventional financing.
6. Securitisation
SPV company set up includes
combining the companies’ financial
assets and debts. This results in issuing
a consolidated financial instrument to
the investors.
7. Holding &
Transferring
Assets
SPV company formation can reduce
red tape due to ease of movement of
assets from one account to another.
Thus, making the entire operational
process easier and faster.
8. Raising Capital & Financing
Ring-fencing & Risk
Sharing
Special Purpose Vehicles can also be utilised as funding structures.
Ring-fencing is a term that describes a
virtual ‘barrier’ to separate a company’s
financial assets from each other. This is
a protective strategy that legally allows
you to isolate the risks of any project
and share these risks with other
investors.
9. Fractional Ownership
Structure
When you form your SPV company set up in UAE, you
can sell the ownership asset shares to individual
shareholders. This allows them to share the benefits
while maintaining lower costs at whole ownership.
Special Purpose Vehicles (SPVs) company set up are
cost effective because they require no minimum share
capital, just need minimum one shareholder and one
director, without the need of leasing out office space.
ADGM SPV setup has zero nationality ownership
restrictions, offers UAE Tax Residency plus access to the
Double Tax Treaty Network. Setting up a SPV company
requires no attestation of documents, allows migration
& continuation of existing business entities as well as
multiple classes of shares.
10. The country of UAE has a simple and efficient business setup process. Consequently, forming a Special
Purpose Vehicle company in UAE is also a straightforward incorporation process. However, given the delicate
nature of the structure, it is better to get someone with expertise in UAE company formation on board the
process.
Go through the Initial Approval by submitting the
KYC
Company incorporation documents
Consent Letter from a Registered Office Provider
The experts at Shuraa will submit the duly filled application through the official portal
Abu Dhabi Global Market will review the application plus the Abu Dhabi Immigration clearance of
Authorise Signatories
Once the process is completed, the SPV license is issued
With experts like Shuraa, you can form your Special Purpose Vehicle company is four easy steps and
within 2 weeks:
1.
2.
3.
4.
ADGM SVP Company Set Up Process
11. The ADGM SPV company registration process can be split into two
costs. In the first year, there is the ADGM fee of USD 1,600 and in
the second year of USD 1,200. Additionally, the ADGM Office
Address and professional service fee are a combined USD 1,400
per year. Therefore, in the first year, the total ADGM SPV company
set up cost is approximately USD 3,000 and USD 2,600 in the
second year.
What is the ADGM
SPV Set Up Cost?
12. It is time to start your SPV
Company
With companies across the world enlarging their global business operations, it is more
important than ever that they keep all their assets secure. An SPV setup in Abu Dhabi is a
legally sound structure to keep the parent company’s balance sheet safe from financial risk in
case their venture fails.
What’s more, the Special Purpose Vehicle can have its own assets, liabilities, and equity, while
maintaining its separate balance sheet. SPV company set up can be either in the form of a
Limited Liability Company, a Limited Partnership structure or as a trust. Out of these LLC is the
most common SPV structure.
13. Book a Free Appointment
www.shuraa.com
Phone
+971 44081900, +971 507775554
Email
info@shuraa.com
Adress
Sheikh Zayed Road, Office 501, 5th floor,
Aspin Commercial Tower, Dubai, UAE
One of our business setup consultants will get
back to you within 24 working hours.
