5 Reasons to Set Up an SPV in the UK

The UK stands as an ideal jurisdiction for business ventures, underpinned by its robust legal framework, strategic global positioning and favourable economic conditions. Consequently, an increasing number of enterprises are opting to establish Special Purpose Vehicles ("SPVs") within the UK to capitalise on these advantages.

The UK SPV market is characterised by its involvement in intricate, high-risk transactions that typically include multiple parties. These transactions often pertain to private-debt securitisation and frequently involve sectors such as real estate or infrastructure. A UK SPV is valued for its effectiveness in isolating and managing risk.

We set out below, five important factors that highlight why the UK is an attractive option for establishing structures and vehicles that leverage its framework.

1. Global Trade Centre: London has been a key player in global trade since the 17th century and remains the largest foreign-exchange centre in the world. The London Stock Exchange is known for being the most international market for trading primary and secondary equity and debt securities.

2. Quick & Flexible Setup: In the UK, SPVs can be established as various types of companies, most commonly as private companies limited by shares (Ltd) or public limited companies (Plc). Plc SPVs are typically used for public securities offerings. With online filing, SPVs can be set up within 24 hours.

3. Tax Benefits: There are exemptions available in the UK for securitised debt, which provide beneficial tax treatment. Additionally, businesses can leverage the UK’s extensive network of double-tax treaties, designed to minimise tax liabilities and prevent double taxation, thereby enhancing overall financial efficiency.

4. Access to Capital: Organisations can access various funding sources, such as venture capital, private equity, and a strong banking sector. Numerous financial institutions and investment firms offer ample opportunities to secure necessary capital, ensuring SPVs are well-funded for smooth operations and growth.

5. Common Law System: The UK’s company law is known for being fair, robust, and comprehensive. This makes the UK an attractive option for clients who want to show their commitment to transparency and compliance. The UK legal system, based on common law, is considered business-friendly and adaptable, evolving quickly to meet business needs.

How We Can Help

Through our team of highly competent and experienced practitioners, Cafico International offers the full range of services required for the establishment, operation and management of SPVs.

Our specialist legal and accounting teams ensure that corporate governance and financial management are carried out to the highest standards. Through careful monitoring and diligent application, we ensure that all SPVs are fully compliant with all applicable laws and regulations.

Working extensively with the originators of securitised assets, financial institutions, investment managers, arrangers, trustees, investors, collateral managers and regulators, we offer a comprehensive suite of services that can be tailored to meet the specific requirements of each transactions to offer the best solutions for your business’ needs.

For more information, or to find out how Cafico International can assist your business, please reach out to Beata Frois.