Guide to setting up Special Purpose Vehicles

Author: | Published: 23 May 2005
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Securitization is one of the few areas of the capital markets still to be active and growing while others, most notably the equity markets have been subdued for two to three years.

Fundamental to these transactions is the decision of where to incorporate special purpose vehicles (SPVs). Jurisdictions such as the Cayman Islands, Jersey and the Netherlands have established a niche as suitable environments in which to set these up. Countries such as Ireland have passed special legislation to encourage originators to establish SPVs there.

Those setting up SPVs need to know about the bankruptcy treatment of vehicles in specific jurisdictions, their tax treatment and continuing management requirements as well as knowing about fees for registering vehicles, how long it takes to set them up and how good the local infrastructure of service providers might be.

Here, IFLR provides a guide to establishing SPVs in six leading centres.