SPV
Special Purpose Vehicle
- What it is
- A company set up for one specific task or deal
- Why it is needed
- To separate the project’s risks and assets from the rest of the business
- Where it is used
- Real estate, investment projects, joint ventures, financing
- Advantage
- Transparency for investors and a clear perimeter for the deal
- Drawback
- Additional costs of setting it up and maintaining it
In plain words
An SPV (special purpose vehicle) is a company set up for one specific task: buying a property, carrying out a project, arranging a joint investment, raising finance. Put simply: a separate legal entity acting as a container in which only this project lives and nothing else.
The main point is isolation. The project’s risks and obligations are enclosed within a separate company and do not affect the rest of the owner’s business, while investors see a clear perimeter: a specific asset, specific obligations, a transparent ownership structure. When exiting the project, selling a stake in such a company is often easier than breaking up the asset.
The flip side is cost and administration: each company requires registration, reporting, accounting and banking. There is also an important tax point: selling a stake in a company and selling the asset itself may be taxed differently, and differently in different countries. That is why the arrangement is designed with a tax adviser, not by analogy.
When an SPV is set up
What is thought through when setting it up
- What goes into the company
- What obligations
- The structure’s lifespan
- Taxation of the project’s income
- Selling a stake or the asset
- Profit repatriation
- Participants’ stakes
- Rights on exit
- Decision-making procedure
- Reporting
- A bank account
- The cost of maintenance
How an SPV is usually set up
- 01Define the project’s perimeter
- 02Check the tax arrangement
- 03Register the company
- 04Put the asset and financing in place
- 05Run it and, on exit, sell it
What you need to know
- One company — one project
- Isolating risks works only if the affairs are kept clean
- Selling a stake and selling the asset are taxed differently
- Each structure requires administration
- The bank checks the company’s purpose and beneficial owners
Common mistakes
- Mixing projects in one company
- Creating a structure without calculating the taxes
- Underestimating the cost of maintenance
- Not setting out the procedure for participants to exit
- Leaving empty companies after the project ends
What this means for a BRIDGES client
When buying property abroad, we always work out whether to hold it in your own name or through a company: this determines the taxes, the exit procedure and whether the property will count under your programme’s requirements.
Frequently asked questions
01 /What is an SPV, in plain words?
A separate company set up for one specific project or deal, to separate its risks and assets from the rest of the business.
02 /Why is a separate company needed?
It isolates the project’s risks, gives investors a clear perimeter and simplifies exit: selling a stake is often easier than dividing an asset.
03 /Is it always advantageous?
No. Each structure costs money and requires administration. For a small project the costs may outweigh the benefit.
04 /How does it affect taxes?
Selling a stake in a company and selling the asset itself are taxed differently, and differently in different countries. The arrangement is calculated in advance.
05 /Is an SPV suitable for a Golden Visa?
It depends on the programme: some of them require the property to be held in the applicant’s own name. This is confirmed before the deal.
06 /What should be done after the project ends?
The structure is closed in the proper way. Abandoned companies with reporting arrears surface in future checks.
See also
Read next
This material has undergone editorial review by BRIDGES.
Buying a property or joining a project?
We will work out how to structure the deal — in your own name or through a company — taking taxes and your programme into account.