DIFC Special Purpose Companies Grow in Popularity

Dubai International Financial Centre (DIFC) recently hosted its first Knowledge Series event for 2012, highlighting the benefits of a Special Purpose Company (SPC) and its role in enabling structured finance transactions. An SPC can be easily structured and incorporated in the DIFC, while enjoying certain exemptions from a number of tedious requirements.  One of the most high profile users of an SPC is the Government of Dubai, which in 2011 chose to establish an SPC — named Salik One SPC Limited — for use as a vehicle to raise US$800 million in a co-financing transaction involving two currencies with conventional and Islamic tranches.

Key benefits enjoyed by an SPC include:

(a) 100 percent foreign ownership and limited liability;
(b) zero tax environment;
(c) no requirement to lease a physical office space, instead an SPC is only required to maintain a registered office address in the DIFC;
(d) no requirement to maintain, file or audit accounts;
(e) no requirement of an annual shareholder meeting; and
(f) access to the DIFC’s internationally recognized regulatory and legal system.

Companies that are interested in establishing an SPC should also be aware of business purposes for which an SPV can be used as well as legal restrictions on its use. Diaz Reus is ideally placed to advise companies on the procedures and legal considerations involved in setting up an SPV in the DIFC. Download this PDF to learn more about DIFC Special Purpose Companies.