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.
ADGM has three independent governing authorities:
- Registration Authority (RA)
- Financial Services Regulatory Authority (FSRA)
- ADGM Courts
The presence of these regulatory authorities makes it one of the most reliable and trusted financial centers in that region. Additionally, since its establishment six years ago, ADGM has managed to build a progressive, efficient, and bustling business environment. Today, it boasts an outstanding 2,385 registrations, a workforce of over 22,000 people and manages assets worth over USD 26 billion.
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 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.
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.
With experts like Shuraa, you can form your Special Purpose Vehicle company is four easy steps and within 2 weeks:
- 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
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.
Note: Costs are subject to changes in the UAE Laws and Regulations
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.
Shuraa Business Setup caters to all forms of company incorporation needs. With over 20 years of presence in Dubai, Shuraa has all the legal expertise for business incorporation in the UAE. Get end-to-end corporate solutions under one roof: business license, corporate account setup, PRO & visa services, VAT, tax & book-keeping, and more. We are just a call away at +971 44081900. Or you can send us a WhatsApp message at +971 507775554, or simply email at [email protected].
