We set up SPV for you and handle it till strike-off

To set up an SPV in Singapore, decide if the Special Purpose Vehicle is right for your business structure. Then, you can incorporate it as a Private Limited Company by registering your company with a corporate service provider or doing it on your own with ACRA. Next, you can create a company constitution, stating the company’s regulations, purpose, business structure, functions and specifics.

An SPV is a separate legal entity created by your parent company. It has its own assets, liabilities and balance sheets that are not linked to the parent company. When you create an SPV, it works as any normal company would. A Special Purpose Vehicle allows your company to go into higher-risk projects such as investments, certain business transactions, separate projects, mergers, acquisitions and more.

An SPV is an investment structure that is a subsidiary of the company that created it. This means, its financial activities are reported on a separate balance sheet, and is financially independent of the parent company. Essentially, each investment structured as an SPV is its own private limited company.

An SPV may be created for risk sharing, securitization, asset transfer or property sales. In risk sharing purposes, companies can legally isolate the risks of a project, and then share this risk with other investors. Securitization is the financial practice of pooling various types of contractual debt like auto loans, commercial mortgages, residential mortgages, or credit card debt obligations and selling these debt as bonds, pass-through securities, or Collateralized mortgage obligation (CMOs), to various investors. For asset transfer, a company can create an SPV to own the assets and sell the SPV as part of a merger and acquisition process when they want to transfer the asset. For the purpose of property sale, should the taxes on property sales be higher than the capital gain realized from the sale, a company may create an SPV that will own the properties for sale. 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.

Securitization is the financial practice of pooling various types of contractual debt like auto loans, commercial mortgages, residential mortgages, or credit card debt obligations and selling these debt as bonds to various investors. SPVs are the key characteristic of a securitisation and are commonly used to securitize loans and other receivables.

A SPV can also be created to finance, for example a venture. By financing a project through forming an SPV, the debt burden of the parent company will not increase. This allows investors to invest in specific projects without investing in the parent company. This is usually used in the financing of large infrastructure projects.

In Singapore, an SPV provides an avenue for investors to put money into and receive equity from companies. Investors can create a vehicle through which a considerable amount of money can be collected and invested in a startup. Using the same Special Purpose Vehicle, the parent company will deal with one company instead of multiple private investors.Through Special Purpose Vehicles, startups can attract more investors.