The special purpose vehicle or entity (SPV/SPE) is mainly used in the investment funds industry and is the correspondent of subsidiaries of foreign companies in Singapore. The SPE or SPV is usually set up in order to ensure the business in Singapore will continue even if anything goes wrong with the parent company. Protection against bankruptcy is the main advantage a special purpose vehicle offers in Singapore. The SPV is usually preferred to other types of investment vehicles because of the enhanced protection from an accounting point of view.
Our company registration agents in Singapore can offer more information on the investment funds industry in the city-state. Meanwhile, we invite you to watch our concise video about the SPV company:
Banks or insurance companies in Singapore are most prone to set up SPVs or SPEs in the city-state. This usually happens because these types of Singapore companies can offer new investment possibilities which cannot be offered by usual funds, such as hedge funds. The SPV is suitable for investment banks because they offer protection related to loans and other monetary tools. The SPV is also used to secure certain assets in Singapore or even to fund new ventures. The Singapore SPV can offer an investor the possibility to allocate money for a specific project alone. Another reason to use a SPV is to raise capital, as this type of entity can borrow money with lower interest.
However, those considering to open a company in Singapore under the form of a SPE or SPV should take into consideration that there are certain risks related to employing them. Our Singapore company formation agents can offer details related to these risks.
The limited liability company is the most employed type of structure when setting up a SPV in Singapore. The company must be registered with the Trade Register as any other type of entity. One should also know that a Singapore SPV or SPE is subject to different accounting requirements than companies incorporated for commercial purposes.
If you want to set up a SPV in Singapore and need assistance, do not hesitate to contact us. Our company formation consultants in Singapore can also offer information on the accounting requirements for SPVs and SPEs.