What are the benefits to setting up a special purpose vehicle (SPV) in Singapore?

Setting up a Special Purpose Vehicle (SPV) in Singapore can offer several benefits:

Tax Efficiency: Singapore has a favourable tax regime for businesses. Income generated by an SPV may be subject to lower tax rates or may even be exempt from certain taxes, especially if the SPV is used for specific purposes like holding investments or intellectual property.
Asset Protection: SPVs can ring-fence assets and liabilities from the parent company or other entities. This can help protect the parent company’s assets in case of financial difficulties or legal claims against the SPV.
Risk Isolation: By segregating specific assets or operations into an SPV, the parent company can limit the impact of any adverse events related to those assets or operations. This can help to protect the overall financial health of the parent company.
Capital Raising: SPVs are commonly used for raising capital for specific projects or investments. Investors may be more willing to participate in a project if it is structured through an SPV, as it can give them greater transparency and control over their investment.
Flexibility: Singapore’s legal and regulatory framework offers flexibility in structuring SPVs to meet specific business needs. This includes customising corporate governance structures, financing arrangements, and legal protections.
Access to International Markets: Singapore is a global financial hub with well-established legal and financial infrastructure. Setting up an SPV in Singapore can provide easier access to international markets and investors.
Reputation: Singapore is known for its political stability, strong rule of law, and business-friendly environment. Establishing an SPV in Singapore can enhance the reputation of the parent company and may improve its access to business opportunities and partnerships.
Ease of Doing Business: Singapore consistently ranks high in global indices for ease of doing business. The process of setting up and operating an SPV in Singapore is relatively streamlined, with efficient government services and minimal bureaucracy.