An ADGM SPV can provide a structured way to hold assets and investments while separating certain financial and legal risks. But the structuring question becomes more involved when the SPV is no longer holding a single asset.
A portfolio may include shares in several companies, real estate interests, investment vehicles or other assets with different ownership, financing and risk profiles. At that point, the issue is not simply whether multiple assets can sit under one SPV. It is whether the structure remains appropriate as the portfolio becomes more complex.
What Should You Consider When Structuring an ADGM SPV for Multiple Assets?
Moving from a single-asset structure to a multi-asset structure introduces several considerations.
1. Ownership and Investment Interests Become More Complex
Not every asset necessarily has the same ownership arrangements.
One investment may be wholly owned, while another may involve co-investors, subsidiaries or different shareholder interests. Before placing multiple assets under one SPV, the ownership of each asset and the relationship between the investors need to be clearly considered.
A structure that works for one asset may not necessarily be suitable for a portfolio with several ownership arrangements.
2. Risk and Liability Need to Be Considered Asset by Asset
One of the key purposes of an SPV structure is the separation of assets and liabilities.
An SPV separates its assets from its owners, not from each other. If a creditor has a claim on one asset, it can generally look to everything held in that same SPV. This means the intended level of separation needs to be considered carefully.
Where assets have significantly different risk profiles or liabilities, investors may consider whether separate SPVs would provide a more appropriate structure rather than placing everything under one entity.
3. Cash Flows and Financing May Differ
Multiple assets can also mean multiple financial arrangements.
One asset may generate regular income, while another may be financed through debt or require additional capital. There may also be different lenders, payment schedules or investment terms.
Keeping these arrangements clearly documented and appropriately accounted for becomes increasingly important as the structure grows.
4. Governance and Compliance Become More Important
A multi-asset structure can create more information to maintain, monitor and report.
Changes in ownership, directors, corporate records, asset-related arrangements and statutory requirements need to be managed throughout the life of the SPV.
For non-exempt ADGM SPVs, an ADGM-licensed Company Service Provider is required to manage certain incorporation, registered-office and ongoing filing responsibilities.
The practical implication is that SPV structuring should not stop at incorporation. The ongoing administration of the structure matters just as much.
The bracketed items are for Roshan or Zuhair to confirm before it goes live.
5. Corporate Tax Treatment Can Differ by Asset
Many investors assume that an ADGM SPV automatically pays no corporate tax. In reality, it must satisfy the conditions to qualify as a Qualifying Free Zone Person. The 0% rate applies only to Qualifying Income, while other taxable income is generally subject to 9% corporate tax.
A multi-asset SPV requires careful analysis because different assets generate different types of income. Shares and securities held for investment may qualify, provided the relevant conditions are met, including a generally uninterrupted 12-month holding period.
Real estate is treated differently. Income from immovable property is generally taxable, except for commercial property in a Free Zone transacted with a Free Zone Person that is the Beneficial Recipient. Commercial property transactions with Non-Free Zone Persons, as well as residential and other non-commercial property income, are generally subject to 9% tax.
The de minimis threshold also applies: non-qualifying Revenue must not exceed the lower of 5% of total Revenue or AED 5 million. If breached, the entity loses QFZP status for the relevant Tax Period and the following four Tax Periods—it cannot simply pay 9% on the non-qualifying income while retaining the 0% regime for the rest.
However, certain immovable-property revenues are excluded from the de minimis calculation. Separating investment securities and real estate into different SPVs may therefore simplify tax analysis and ring-fence exposure, subject to substance, transfer pricing, related-party and tax-group considerations.
One ADGM SPV or Multiple SPVs?
There is no universal answer to whether multiple assets should sit within one SPV or across separate entities.
A single SPV may be considered where the assets have a similar investment purpose, ownership is substantially aligned and the structure remains relatively straightforward.
Multiple SPVs may be considered where assets have different risk profiles, involve different investors or financing arrangements, or may need to be sold or restructured independently.
The decision should therefore be based on the portfolio’s objectives rather than simply the number of assets involved.
The cost and administrative implications of maintaining additional entities should also be considered alongside the potential structural benefits.
How Does the Structure Affect Future Exits?
The structure chosen at the beginning can influence what happens later.
For example, an investor may eventually want to:
- Sell one asset while retaining the others
- Introduce a new investor into a particular investment
- Refinance a specific asset
- Transfer ownership of a subsidiary
- Restructure the group before a transaction
- Separate certain assets before an eventual exit
If all assets sit within one SPV, some of these transactions may require additional restructuring.
This is why the intended exit strategy can be relevant even when the immediate objective is simply to establish a holding structure.
Key Considerations Before Setting Up a Multi-Asset ADGM SPV
Before establishing or expanding an ADGM SPV structure, investors should consider:
What assets will the SPV hold?
The nature of each asset can influence the appropriate structure.
Who owns each asset?
Different investors or ownership percentages may require greater structural separation.
Do the assets carry different risks?
Material differences in risk and liability should be considered before consolidating assets.
Will the assets require different financing?
Separate lenders, debt arrangements or cash flows can add structural complexity.
Could an asset be sold independently?
An anticipated exit or transfer may influence whether separate SPVs are appropriate.
What ongoing obligations will apply?
Incorporation is only one stage of the SPV lifecycle. Corporate administration, filings and compliance requirements need to be maintained throughout.
When a Multi-Asset Structure Needs to Be Reconsidered
Adding another asset to an existing SPV may seem straightforward, but each addition can introduce different ownership, financing or transaction requirements.
A property may need different financing from an equity investment, while one subsidiary may be intended for a future sale and another retained within the group. As the portfolio develops, the structure should therefore be reviewed to ensure it still supports the intended ownership, risk allocation and future transactions.
For some structures, keeping assets together may offer administrative simplicity. For others, separate SPVs may provide greater flexibility. The appropriate approach depends on the assets, parties involved and the structure’s long-term objectives.
How MS Can Help with ADGM SPV Setup and Structuring
An SPV can be incorporated relatively efficiently. The more important exercise is determining how it should fit into the wider ownership structure and how it will be managed after incorporation.
MS supports clients across the structuring and ongoing administration of ADGM SPVs, including:
- Structuring assessment – Reviewing the assets, ownership arrangements, investment objectives and intended use of the SPV before determining the appropriate structure.
- ADGM SPV setup – Managing the incorporation process and supporting the required documentation and administrative steps through establishment.
- Multi-asset structuring – Assessing whether assets should be held within a single SPV or separated across multiple entities based on their ownership, risk, financing and transaction requirements.
- Tax and compliance considerations – Reviewing relevant UAE corporate tax and compliance considerations as part of the structuring process.
- Foundation and holding structures – Where appropriate, considering how an ADGM SPV can sit alongside a Foundation or wider holding arrangement, particularly where ownership and succession are part of the broader planning.
- Ongoing corporate support – Providing continuing support for corporate administration, accounting and compliance requirements after the SPV has been established.
