Setting up a Special Purpose Vehicle (SPV) in 2023

Since 2003, Healy Consultants Group assists our Clients structure and set up Special Purpose Vehicles (SPV). An SPV is often set up by a parent company to fulfil a specific, short-term goal, for example to handle a one-off project, thus minimising any financial risk to the parent company.

• What is an SPV?

  • An SPV is used to isolate or securitise assets and keep them off a parent company’s balance sheet, thus sheltering the parent company from financial risk if a venture fails.
  • An SPV can have its own assets, liabilities and equity, and maintain its own balance sheet.
  • An SPV can be set up as either i) a limited liability company ii) a limited partnership or iii) a trust. An LLC is the most common form of SPV.

• Best uses of an SPV

  • If a company project carries significant risk, by creating a SPV the risks are legally ring fenced and shared by the investors.
  • An SPV is commonly set up to securitise loans or receivables.
  • Certain assets, such as power and water plants, require multiple permits or licenses to operate, but these are generally non-transferable. An SPV can own and consolidate assets and the entity can be sold as a self-contained package.
  • An SPV is formed to finance a project with no additional debt burden to the parent company. Investors do not invest directly in the parent company. For example, the financing of huge infrastructure projects.
  • Some SPV are used to hold properties during sales to avoid paying stamp duty. An SPV which holds properties is subject to capital gains tax, not stamp duty.

• Accounting & tax considerations

  • SPVs pay corporate income tax. As such, global low tax jurisdictions such as Ireland are preferred.
  • SPVs generally do not need a financial services licence. For example in Australia, SPVs do not need an Australia Financial Services licence if they serve wholesale clients.
  • Just like any company, SPVs must complete i) annual tax filings ii) annual returns and sometimes iii) a statutory audit, depending on the jurisdiction.

• Preferred jurisdiction to set up SPV

  Healy Consultants Group’s recommended solution is an Ireland SPV, because:

  • An Irish tax-resident SPV which acquires or holds qualified assets with a market value of at least €10 million is tax neutral.
  • SPVs are Value Added Tax (VAT)-exempt in Ireland.
  • Ireland has double tax treaties with 74 countries.
  • The Irish economy is open, with a pro-business legal infrastructure.

  • On average, it takes between two to four weeks to set up an Irish SPV.
  • An Irish SPV is required to file annual audited accounts prepared in accordance with GAAP or IFRS guidelines.

• Our fees

  Healy Consultants is happy to assist our Clients set up an Irish SPV. Our fee to set up a basic SPV is €8,355. However, fees may differ depending on the SPV’s structure and assets.

• Conclusion

  If you need Healy Consultants Group’s help to set up a SPV, email us and complete this questionnaire. Within six hours, our staff will e-mail reply to you.