Structuring an SPV
It is often the case that the structuring of an SPV transaction
requires that
the SPV company has 'orphan status', meaning that ownership of the
company must
be separate and distinct from the other parties to the
transaction.
The most common method of achieving this is for the shares to be
held by a
Purpose Trust, which can be either charitable or non-charitable
under Guernsey
Trust Law.
If deemed necessary, the objects set out in the company's
Memorandum can be
very specific and limited in terms of the type of transactions
permitted, the
parties with whom the company may contract and similar
restrictions. Although
it is possible to alter the Memorandum to vary such restrictions,
the need to do
so can be avoided by care and anticipation in its initial
drafting.
If the transaction(s) to be undertaken will not generate any
surplus cash
flow then it may be necessary to ensure adequate initial
capitalisation of the
SPV company to cover its running costs over its intended life, up
to and
including its eventual winding up.
Management and control of the SPV may need to be demonstrably
exercised from
Guernsey in order to comply with any non-residency qualifications
in other
relevant jurisdictions.
As long as the company does not derive income from Guernsey
real estate or
have any beneficial ownership by a Guernsey tax-resident
individual, any profits
arising from the company's activities will be taxed in Guernsey at
the standard
rate for companies, being 0%.