UAE Mainland SPV | UAE Mainland SPAC | A New UAE Commercial Companies Law
The UAE has introduced the “New Commercial Companies Law” that is intended to repeal and replace the “Existing Commercial Companies Law” and has come into force on the 2nd of January 2022. This sees a number of legislative changes to mark the UAE’s 50th anniversary, with the aim of establishing the UAE’s position as a global business hub.
The New Commercial Companies Law has, most notably, introduced two new company forms:
- Special purpose vehicle (SPV)
- Special purpose acquisition company (SPAC)
- The special purpose vehicle or (SPV)
The New Law also introduces the concept of a special purpose vehicle which is defined as a company established with the aim of separating the obligations and assets associated with a particular financing operation, from the obligations and assets of the person who incorporated and used it in credit operations, borrowing, securitization, issuance of bonds, transfer of risks associated with insurance, reinsurance, and derivatives operations, in accordance with the provisions of a decision to be issued by SCA.
The definition of the SPV is akin to the Prescribed Companies offered by the Dubai International Financial Centre (DIFC) which may be used as investment holding companies in wider transactions, financing or asset holding structures. Further guidelines and resolutions pertaining to the use of the SPV will be issued by the SCA.
2. The special purpose acquisition company (SPAC)
The SPAC is defined as a PJSC designated as a special purpose acquisition company by the UAE Securities and Commodities Authority (SCA) and established for the sole purpose of acquiring or merging with another company. SPACs are exempt from the New Law and will be subject to regulations to be issued by the SCA.
The introduction of the SPAC complements the introduction of the provisions related to the division of JSCs both aiming to offer greater flexibility to public offerings, spin-off, merger and demerger transactions.
How Can We Support In Obtaining UAE Mainland SPVs and UAE Mainland SPACs?
It is important for potential applicants interested in setting up a Company to choose the correct license and comply with the relevant regulatory requirements, and this is often challenging and confusing to navigate. Choosing our advisory services ensures that there is a smooth setup from start to finish. If you wish to discuss how we can assist you in setting up a UAE Mainland SPV or UAE Mainland SPAC, feel free to contact us.
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