Why Setup SPVs in UAE as a Holding Company or Holding Vehicle
Special Purpose Vehicles (SPVs), are typically set up in for a variety of purposes including one of which is to isolate financial and legal risk by ring-fencing assets and liabilities. SPVs can be established as holding companies or holding vehicles, 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. In fact, the UAE SPV, specifically the ADGM SPV provides a viable option for a range of holding and investment structures.
Main features & benefits of the ADGM SPV
- The ADGM SPV only acts as a passive holding company, and so cannot avail visas or functional office space in the centre.
- There are no restrictions on foreign ownership in the ADGM, and so ADGM SPVs can issue 100% of its shares to foreign nationals.
- The SPV in ADGM allows flexibility in ownership.
- There are also no such restrictions on the nationality of the ownership.
- SPVs can be used in shareholding structures in operational companies; including more robust arrangements, under Common Law, for the relationship between a UAE National and the foreign shareholders.
- The ADGM SPV can act as a holding structure for a relatively low cost, and offer flexibility at the same time.
- The ADGM SPV can hold any types of securities, including bonds, listed or unlisted shares in downstream entities, stocks, real estate worldwide, cash and commodities, loans, and intangible assets such as Intellectual Property and Patents.
- There is no requirement to lease an office space but there has to be a maintenance of a registered address with the help of a registered agent.
- The Memorandum of the SPV can be tailor-made to each client’s specific requirements and wholly customized to allow for multiple classes of shares, with different voting, dividend and distribution rights. Investors can be onboarded in a separate class of shares and founders can maintain control of operational aspects of the startup through a distinct founder share class.
- ADGM SPVs are able to issue sophisticated instruments and convertibles including SAFE notes, warrants and the like. This also allows for access to alternate sources of financing.
- In the case of family asset protection, family wealth planning and management, which can sometimes be very complex and sensitive, ADGM SPVs allow for better management and can be used in conjunction with ADGM Foundations.
- Since ADGM allows for nominee arrangements and trust agreements. This can be utilised effectively when setting up an ADGM SPV where a Nominee Shareholder or Nominee Director could be appointed to hold the shares on behalf of the UBOs (Ultimate Beneficiary Owners) and sit on the board to carry out the instructions of the UBOs. This is extremely relevant for investors who wish to protect the rights of third parties, or where the stakeholders agree for one or more shareholders to hold the shares on behalf of others.
- The ADGM SPV also has access to the DTAs Double Taxation Agreement that the UAE has in place with a host of major countries.
- Currently, the ADGM is still a zero-tax jurisdiction and there are no corporate, withholding or income taxes in the centre. 100% of the profits of an ADGM SPV can be repatriated.
- The SPV can be set up within 7-10 working days subject to satisfying the registrar.
How can we help in setting up an SPV
- Provision of Registered Agent – for the incorporation of the SPV.
- Provision of Registered Office.
- Provision of Nominee Shareholders.
- Provision of Non-Executive Directors.
- Provision of Company Secretaries.
- Provision of Accounting services.
- Customisation of the Articles of Association.
- Economic Substance Notifications & Filings.
- Assistance in Bank Account Opening.
Wincore provides tailor-made solutions to fit every client’s unique requirement. Contracting the services of Experts in setting up and maintaining SPV structures in UAE will remove the burden of completing resource-heavy and time-consuming incorporation and administrative requirements which can act as a barrier to your objectives. Not only will we assist in reducing costs and corporate complexity, we also bring with us a lot of immeasurable value through our experience. Please send us a mail at [email protected] or call us now on +971 4 221 2602 for assistance on these matters.
Wincore specializes in Tax, Estate, Corporate and Fiduciary matters. We provide pragmatic, flexible, and efficient solutions to individual entrepreneurs, startup businesses, foreign and local SMEs, multinationals, wealthy international families, HNWIs, and UHNWIs.