Setting up an SPV company

Special Purpose Vehicle (SPV) company set up in ADGM

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.

ABOUT ABU DHABI

GLOBAL MARKET (ADGM)

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

Benefits of ADGM SPV Company Set Up

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

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.

Securitisation

SPV company set up includes combining the companies’ financial assets and debts. This results in issuing a consolidated financial instrument to the investors.

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.

Raising Capital & Financing

Special Purpose Vehicles can also be utilised as funding structures.

Ring-fencing & Risk Sharing

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.

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 whilemaintaininglowercostsatwholeownership.

Special Purpose Vehicles (SPVs) company set up are costeffectivebecausetheyrequirenominimumshare 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,offersUAETaxResidencyplusaccesstothe DoubleTaxTreatyNetwork.SettingupaSPVcompany requiresnoattestationofdocuments,allowsmigration & continuation of existing business entities as well as multipleclassesofshares.

ADGM SVP Company Set Up Process

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.

GothroughtheInitialApprovalbysubmittingthe KYC Companyincorporationdocuments

ConsentLetterfromaRegisteredOfficeProvider

TheexpertsatShuraawillsubmitthedulyfilledapplicationthroughtheofficialportal AbuDhabiGlobalMarketwillreviewtheapplicationplustheAbuDhabiImmigrationclearanceof

AuthoriseSignatories

WithexpertslikeShuraa,youcanformyourSpecialPurposeVehiclecompanyisfoureasystepsand within2weeks: 1. 2. 3. 4.

Oncetheprocessiscompleted,theSPVlicenseisissued

What is the ADGM SPV Set Up Cost?

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.

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’smore,theSpecialPurposeVehiclecanhaveitsownassets,liabilities,andequity,while maintaining its separate balance sheet. SPV company set up can be either in the form of a LimitedLiabilityCompany,aLimitedPartnershipstructureorasatrust.OutoftheseLLCisthe mostcommonSPVstructure.