How to Set Up an SPV: Everything You Need to Know

To set up an SPV (Special Purpose Vehicle) is to create a dedicated legal structure designed for a specific investment or transaction.

The process begins with choosing the legal structure and jurisdiction, usually a limited company, trust, or partnership based on your investment goals, tax strategy, and regulatory needs.

It isn’t just about forming a new company. It’s about aligning ownership, liability, and tax strategy with your investment targets.

Whether you’re acquiring property, raising capital, or isolating risk in a joint venture, setting up an SPV gives you control and separation that traditional ownership can’t provide.

In this guide, we’ll cover:

• How do you create an SPV?
• Who can set up an SPV?
• How long is the processing time for setting up an SPV?
• How many investors can you have in a Special Purpose Vehicle?
• What is the difference between SPE and SPV?

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Le informazioni contenute in questo articolo hanno un valore puramente indicativo. Non costituiscono consulenza finanziaria, legale o fiscale e non rappresentano una raccomandazione o una sollecitazione a investire. Alcuni fatti potrebbero essere cambiati dal momento della stesura.

How to Start an SPV

Here’s a step-by-step guide:

• Choose the jurisdiction: The first step is selecting where to incorporate the SPV. Popular options include the UK (via Companies House), the US (as an LLC at the state level), or offshore centers like the British Virgin Islands (BVI) and the Cayman Islands for tax neutrality or investor privacy.
• Decide on the legal form: SPVs are commonly structured as limited companies (Ltd.), limited liability companies (LLCs), or fiducia. The right format depends on your goals, whether for property ownership, investment syndication, or estate planning.
• Prepare incorporation documents: You’ll need governing documents such as the Articles of Association, shareholder agreements, and in the case of co-investments, you’ll also need joint venture or subscription agreements. These define ownership rights, governance, and exit procedures.
• Register the SPV with authorities: Depending on the jurisdiction, this involves filing with entities like Companies House in the UK or a state registry in the US. Offshore setups require working with licensed service providers.
• Open a bank account and obtain a tax ID: After incorporation, the SPV will need a dedicated bank account and applicable tax registrations (e.g., EIN in the US, UTR in the UK). These are essential for holding assets, receiving income, and filing returns.
• Establish compliance protocols: SPVs must meet local requirements for reporting, accounting, and possibly international disclosures (such as FATCA or CRS). This is especially important when managing funds from multiple investors.

While it’s possible to create an SPV independently, most investors especially those involved in high-value or cross-border deals, engage legal counsel, corporate service providers, or formation agents to ensure accuracy and compliance from the outset.

Who Can Create an SPV?

An SPV can be created by individuals, corporations, trusts, or investment groups.

There are generally no restrictions on who can establish one, as long as legal and regulatory requirements are met.

• Eligible creators: Individuals, corporations, family trusts, and investor syndicates can all create an SPV. The structure is especially popular among high-net-worth individuals and institutions looking for control, asset isolation, or investor pooling.
• No residency requirement in most cases: Many jurisdictions such as the British Virgin Islands, Cayman Islands, and even the UK do not require the SPV’s owners or directors to be residents or citizens. This makes SPVs attractive for cross-border deals and international investors.
• Know Your Customer (KYC) and beneficial ownership: Although forming an SPV is often straightforward, most jurisdictions require disclosure of the ultimate beneficial owners (UBOs). KYC protocols are strictly enforced, especially in regulated or offshore environments.
• Foreign ownership and nominee restrictions: Some countries impose limitations on foreign-controlled entities or restrict the use of nominee directors and shareholders. While these nominee services may be used to enhance privacy, they must still comply with local transparency laws and anti-money laundering regulations.

Creating an SPV is generally accessible to most investor profiles, but understanding local legal nuances and compliance obligations is crucial before initiating the process.

How Long Does It Take to Create an SPV?

How Many Investors Are in an SPV?

There is no fixed limit on how many investors can participate in a Special Purpose Vehicle.

The number depends on the structure, regulatory environment, and purpose of the SPV.

• Highly flexible participation: An SPV can be formed for a single investor, a small partnership, or a large syndicate involving dozens of stakeholders. This flexibility makes SPVs ideal for club deals, immobiliare joint ventures, and private placements.
• Used in co-investment structures: Many SPVs are created to facilitate co-investment opportunities. Multiple investors pool capital to back a single deal while maintaining clear legal separation from other assets or ventures.
• Governed by shareholder agreements: As the number of investors grows, clear shareholder agreements become essential. These documents outline voting rights, exit provisions, profit distribution, dispute resolution mechanisms, and decision-making processes.

While jurisdictions may impose regulatory thresholds (such as limits on unregulated offers or private placement exemptions), the underlying structure of an SPV remains adaptable to accommodate a wide range of investor types and group sizes.

Is There a Difference Between SPV and SPE?

While often used interchangeably, SPV and SPE (Special Purpose Entity) have subtle differences rooted in usage context.

• SPV is a term more commonly used in investment and finance, particularly for property acquisitions, venture capital syndications, or private equity structures. It refers to a legally separate entity created for a single, defined purpose usually to isolate risk or streamline ownership.
• SPE, on the other hand, is a broader accounting or legal term used in corporate structuring, securitization, leasing arrangements, and balance sheet management. The term is often seen in financial statements, regulatory filings, or structured finance transactions.

In practice:

• Both terms refer to legally distinct entities created to carry out specific transactions while limiting exposure to the parent company or investors.
• The distinction is more about language and context. SPE is more common in corporate governance and reporting, while SPV is widely used in investment structuring.

For most investors and dealmakers, the functional differences are minimal.

Whether labeled SPV or SPE, the entity must serve its intended legal and financial purpose while complying with jurisdictional rules.

Conclusione

An SPV is not just a legal wrapper; it’s a strategic instrument that can enhance control, streamline ownership, and manage investment risk when used correctly.

But its effectiveness depends on how well it’s structured, maintained, and aligned with your broader goals.

From compliance to jurisdictional nuances, each element matters.

When thoughtfully implemented, an SPV can offer significant advantages for targeted acquisitions, estate planning, or cross-border ventures.

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Adam è un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.