What are Special Purpose Vehicles (SPVs)?
SPVs (Special Purpose Vehicles) are separate corporate vehicles designed for securitization and isolating financial and legal risk by ring-fencing assets and liabilities. SPVs can be established as subsidiaries, project or joint venture vehicles to ensure that only those assets related to a transaction are exposed to the liabilities associated with that transaction.
With SPVs having a separate legal personality, claims by your SPV’s creditors cannot attach to the assets of the SPV’s shareholders or any of its sister companies.
- Structured finance: This financial instrument is available to companies to restructure debt, raise capital, transfer assets, and manage risk. Conventional financing does not address these issues.
- Securitisations: This includes bringing together the companies various financial assets and debts. Therefore, issuing the investors with a consolidated financial instrument.
- Asset holding and transfers: A transfer includes the movement of assets from one account to another account. An SPV reduces red tape and as a result, makes this process much easier and faster.
- Financing and raising capital: using SPVs as a funding structure.
- Ring-fencing and risk sharing: This is a protective strategy to create a ‘barrier’ in order to separate the company’s financial assets from the rest, legally allowing you to isolate the risks of a project and share those risks with other investors.
- Fractional ownership structures: Selling ownership asset shares to individual shareholders, who then share the benefits. As a result, keeping the cost lower than whole ownership.
Why establish an SPV with RAK ICC?
RAK ICC is a futureproof destination for your business, whether you are starting up or relocating from elsewhere. Benefits of setting up a Special Purpose Vehicle (SPV) with RAK ICC include:
- Fast and straightforward incorporation process
- Simple migration from various global jurisdictions
- Whitelisted jurisdiction
- 100% tax exemption
- A welcoming and encouraging business environment