Special Purpose Vehicles, commonly referred to as SPVs, are essentially holding companies that are established with the purpose of mitigating financial and legal risks by isolating specific assets and liabilities through a process known as ring-fencing.
The Special Purpose Vehicle (SPV) framework implemented at the Abu Dhabi Global Market (ADGM) has been thoughtfully designed to prioritize flexibility, resilience, simplicity, and efficiency, taking into account international best practices. An SPV can be used to attract investors for the investment in the operational entity.
CBD Formations is a registered corporate service provider with the ADGM.
Benefits For Property Owners and High Net Worth Individuals (HNWI)
- Asset Protection: By creating an ADGM SPV, property owners can segregate and protect their property assets within a separate legal entity. This can help shield the owner’s personal assets from potential liabilities associated with the property, providing an additional layer of protection.
- Limited Liability: The ADGM SPV structure offers limited liability, meaning that the property owner’s liability is generally limited to the amount they have invested in the SPV. This can help mitigate risks associated with property ownership and provide financial security.
- Flexible Ownership Structure: ADGM allows for flexible ownership structures, including the ability to have multiple shareholders and different classes of shares. This can be beneficial for property owners who want to involve multiple investors or structure their ownership arrangements in a specific way.
- Tax Efficiency: The ADGM jurisdiction offers attractive tax benefits, including zero corporate and personal taxes.
- International Recognition: ADGM is a globally recognized financial centre that adheres to international standards and best practices, which will enhance the reputation and credibility of property owners.
- Regulatory Environment: ADGM provides a well-regulated and transparent business environment, offering investor protections and legal certainty, ensuring compliance with relevant laws and regulations, promoting investor confidence and reducing risks associated with property ownership.
- Property Sale: An SPV may be created to hold or sell property. It can then sell the SPV instead of the properties and pay tax on the capital gain from the sale instead of having to pay the property sales tax.
Setting Up an SPV
Please note that pursuant to the new provisions of ADGM Companies Regulations, in order to incorporate a non-exempt SPV in ADGM on or after 12 July 2021, a Company Service Provider must be appointed. As a registered corporate service provider with the ADGM, CBD Formations assists with setting up Special Purpose Vehicles in compliance with the ADGM.
Get In Touch With Us Today!
For more information on ADGM entities and the different types of set ups, email us on firstname.lastname@example.org or call/whatsapp +971 56 218 4695 or visit our website.