These entities offer a bespoke approach to wealth management, aligning seamlessly with the sophisticated financial objectives of discerning investors.

What is a Special Purpose Vehicle (SPV)?

An SPV is a legally distinct entity created to fulfil specific financial or investment objectives. By segregating certain assets or operations from the parent company’s balance sheet, SPVs effectively isolate financial and legal risks. This structural flexibility allows investors to undertake new ventures without exposing their entire portfolio to potential liabilities.​

Advantages of SPVs for HNWIs in the UAE

1. Tax Efficiency

The UAE’s favourable tax regime enhances the appeal of SPVs. Entities established in jurisdictions like the Abu Dhabi Global Market (ADGM) can apply for a Tax Residency Certificate, enabling access to the UAE’s extensive network of Double Taxation Avoidance Agreements. This strategic positioning can lead to significant tax savings and optimised investment returns.

2. Risk Isolation

SPVs serve as a protective barrier, isolating specific investments or projects from the broader portfolio. This segregation ensures that any financial or legal risks associated with a particular venture do not adversely impact the investor’s overall wealth.

3. Confidentiality and Privacy

For HNWIs who prioritise discretion, SPVs offer enhanced privacy by keeping investment details confidential. This level of anonymity is invaluable in maintaining a low profile while managing substantial assets.

4. Flexible Investment Opportunities

SPVs provide the flexibility to engage in a diverse array of investment activities, including real estate acquisitions, joint ventures, and intellectual property holdings. This versatility empowers investors to capitalise on emerging opportunities without the constraints typically associated with traditional business structures. ​

Establishing an SPV in the UAE

The UAE offers several jurisdictions for setting up SPVs, with ADGM and the Dubai International Financial Centre (DIFC) being the most prominent. These financial free zones provide robust legal frameworks, streamlined registration processes, and a business-friendly environment conducive to SPV operations.

Navigating the intricacies of SPV formation requires expert guidance to ensure compliance and optimal structuring.

At Luxe Incorporations, we specialise in assisting high-net-worth investors with the establishment and management of SPVs in the UAE. ​To explore how an SPV can enhance your investment strategy and to receive personalised assistance, get in touch with us today.