Abu Dhabi Global Markets SPV
The Abu Dhabi Global Markets (ADGM) financial free zone has created a flexible, robust, simple and efficient Special Purpose Vehicle (SPV) regime that caters to a broad range of business types, uses and industry sectors including but not limited to aviation financing and leasing, corporates, sovereign wealth funds, single family offices, trustees and individual investors.
SPVs are corporate vehicles, typically private companies, established for the purpose of isolating financial and legal risk by ring-fencing assets and liabilities. SPVs can be established as 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. The key feature of an SPV is its separate legal personality, which means that claims by an SPV’s creditors cannot attach to the assets of the SPV’s shareholders or any of its sister companies.
ADGM offers a platform from which to fulfill narrow, specific or temporary corporate objectives. There are no restrictions on who can set up an ADGM SPV. It can be an individual or a corporate entity but a minimum of one shareholder is required.
The ADGM follows the English model such that SPVs follow the Companies Regulations rather than separate regulations, which provides consistency across all corporate vehicles. SPVs will be provided with a commercial licence specifying that the company is undertaking SPV activities.
ADGM also provides the option, to applicants meeting certain criteria, for an SPV to be formed as a ‘Restricted Scope Company’ (RSC). RSCs may be incorporated as a subsidiary of either a group that files public consolidated accounts or a company formed by Emiri decree, or as a Single Family Office. RSCs are required to make only limited information disclosure on the public register although full disclosure to the ADGM Registrar is mandatory.
The ADGM SPV regime is underpinned by ADGM’s robust regulatory platform, its common law legal system and independent courts, as well as its highly favourable tax environment. All ADGM-registered companies are eligible to apply for a Tax Residency Certificate from the UAE Ministry of Finance to benefit from the UAE’s extensive double tax treaty network.
As an ADGM-registered agent, Sovereign Corporate Services is permitted to manage an SPV and to provide the registered office address, thereby eliminating the requirement for the client to have a physical office space in the ADGM.
Benefits of the ADGM SPV regime
Key features of an ADGM SPV include:
Typical uses for SPVs
Intellectual Property (IP) – An SPV can be used to separate valuable IP into a standalone SPV that has minimal liabilities and can be used to raise funds and enter into licence agreements with third parties. It can also assist in managing products with a variety of IP components.