Dubai, and specifically, the Dubai International Financial Centre (DIFC) serves as a prominent global centre for the structuring of Special Purpose Vehicles (SPVs), due to clear legislation, tax effective processes and business friendliness. SPVs can be used for a variety of purposes including investment holding structures, asset-securitization, mergers and acquisitions, and private equity.
This guide provides an understanding of the benefits, establishment and considerations of a Special Purpose Vehicle SPV in Dubai in the Dubai International Financial Centre (DIFC).
What is a Special Purpose Vehicle (SPV)?
A SPV is an entity established for a different legally defined purpose, usually to' ringfence' risk, hold assets or undertake complex transactions. Ordinary examples include:
- Holding assets (real estate, intellectual property, shareholdings)
- Private equity & venture capital
- Debt securitisation & structured finance
- Mergers, acquisitions and joint ventures
- Bankruptcy remoteness (limiting your downside liability)
Why Set Up an SPV in Dubai (DIFC)?
The Dubai International Financial Centre (DIFC) is gaining popularity as a jurisdiction for setting up SPVs, for a number of reasons.
✔ Tax Neutrality - No capital gains tax, no income tax, and no corporate tax.
✔ 100% Foreign Ownership - You do not need a local partner.
✔ Common Law Framework - independent legal system based on English law.
✔ Investor Confidence - Always well recognized by global financial institutions.
✔ Ease of Setup - Accelerated process with little bureaucracy.
Types of SPV Structures in DIFC
DIFC allows multiple SPV structures, including:
- Limited Liability Company (LLC) – Most common for holding assets.
- Limited Partnership (LP) – Used in private equity & fund structures.
- Investment Trust – For asset management & securitization.
- Foundation – Hybrid structure for estate planning & wealth management.
Step-by-Step Process to Set Up an SPV in DIFC
1. Define the SPV’s Purpose
- Determine if it will be used for holding assets, investments, or financing.
- Ensure compliance with DIFC regulations.
2. Choose a Legal Structure
● Most SPVs are registered as DIFC Limited Liability Companies (LLCs).
● For fund-related SPVs, a limited partner (LP) or Investment Trust may be preferred.
3. Select a Company Name
● Must comply with DIFC naming conventions (no restricted words like "Bank" without approval).
4. Submit Required Documents
● Passport copies of shareholders/directors.
● Proof of address (for all beneficial owners).
● Bank reference letters.
● Business plan/SPV purpose statement.
5. Obtain Regulatory Approval
● DIFC Registrar reviews the application (typically 5-10 business days).
● Additional approvals may be needed for regulated activities.
6. Lease a Registered Office
● DIFC requires a physical address (virtual/flexi-desks available).
7. Finalize Incorporation & Licensing
● Pay registration fees (varies by structure).
● Receive Certificate of Incorporation and DIFC SPV license.
8. Open a Corporate Bank Account
● Choose a bank in the UAE or internationally (the DIFC is home to over 500 financial firms).
9. Compliance & Ongoing Requirements
● Annual audit (if required).
● Renewal of license (annual fees apply).
Key Benefits of a DIFC SPV
🔹 Asset Protection – Legal separation from parent company risks.
🔹 Tax Efficiency – No UAE taxes on offshore income.
🔹 Confidentiality – No public disclosure of beneficial owners (unless required by law).
🔹 Global Recognition – DIFC is trusted by international investors.
Who Should Consider a DIFC SPV?
✔ Private equity & venture capital firms.
✔ Family offices & wealth managers.
✔ Real estate investors holding international assets.
✔ Multinational corporations for M&A transactions.
✔ Structured finance & securitization firms.
Final Thoughts
Establishing an SPV in Dubai’s DIFC provides a secure, tax-efficient, and globally recognized structure for asset management, investments, and financial transactions. With a streamlined setup process and strong legal protections, DIFC remains a top choice for international investors.
