Essential Guidance on SPV ownership of shares in Another UAE Company
Definitely, SPV ownership of shares can be owned in other companies as well, making it useful for structuring ownership, separating assets and holding investments.
SPV can be maintained between investors and other operating or investment companies leveraging a clear ownership chain.
Explore how SPV ownership of shares works, including UAE and foreign company structures, ownership chains, dividends, governance rights, and beneficial ownership considerations.
UAE SPV Parent/subsidiary structure
An SPV can perform as a holding or parent entity owning shares in another company.
| Structure | Ownership |
| Investor » SPV » company | SPV ownership of shares in the company. |
| Investor » SPV » multiple companies | SPV ownership of shares in several companies. |
| Company » SPV » subsidiary | SPV ownership of shares with broader corporate structure. |
SPV ownership of shares in UAE companies
An SPV can hold shares of a UAE company in terms of constitutional documents, ownership rules and relevant jurisdiction of the company.
This can permit an investor to keep separate investment-holding functions through the underlying operating business.
Typical structure
Investor » UAE SPV »UAE operating company
The SPV becomes a registered shareholder of the underlying company where the investor owns the SPV.
SPV ownership of shares for Foreign companies
SPV ownership does not limit to UAE companies. In terms of applicable laws and jurisdiction, an SPV can be structured to hold interest in overseas investment and foreign companies. Prior to implementation of structure, it is necessary for foreign investors to examine:
- Tax treatment.
- Reporting requirements.
- Beneficial ownership rules.
- Local corporate laws.
- Foreign ownership restrictions.
SPV Ownership chain
The ownership chain identifies who ultimately controls the investment. For instance:
| Level | Entity | Role |
| 1 | Investor | Ultimate owner. |
| 2 | SPV | Holding vehicle. |
| 3 | Company A | Underlying investment. |
Such structure can develop ownership and governance easier for document specification where an investor holds interest in multiple companies.
Dividends on UAE SPV shares
From the company dividend being paid, SPV can receive it as part of its shareholder. The necessary tax treatment relies on where the companies are located and its applicable Tax rules.
| Situation | Simple meaning |
| SPV owns company shares | SPV can get dividends. |
| Company earn profit | Company dividends can be distributed. |
| SPV receive dividends | SPV receives money as a shareholder. |
| Tax on dividends | Rely on applicable Tax rules. |
Governance of SPV owned shares
If SPV is the shareholder, the shareholder rights can be exercised in terms of the specific shares. This involve:
- Voting on company decisions.
- Receiving dividends.
- Participating in shareholder meetings.
- Transferring the shares where permitted.
- Approving certain major decisions
Exact rights of the shareholder depends on share type and company rules.
Practical examples of SPV ownership of shares
- Example 1: Single company
One investor wants to become a shareholder of a UAE company by means of a separate entity.
Structure: Investor » SPV » UAE company
In that case, SPV became a shareholder in the UAE company.
- Example 2: Multiple companies
If investors plan to invest in diverse companies.
Structure: Investor » SPV» Company a — Company b — Company c
Under applicable rules, SPV ownership of shares are preserved in all the entities.
- Examples 3: Investment Protection
One investor can utilise SPV in order to keep investment distinct from other business activities.
This developed a clear ownership structure and turned the entity holding investment as simply identifiable.
Conclusion
SPV is more than just a separate company, it is rather your investment owner.
Whether an investor expects to become a shareholder in one or several companies, a perfect SPV structure ownership can become manageable.
Are you planning to get UAE SPV ownership of shares?
Consult with BSC professionals to experience informed decision making and legal steps towards setup development.
Frequently Asked Questions (FAQs)
Can an SPV ownership of shares be collected in another UAE company?
Yes, an SPV ownership of shares can be taken in another company in the UAE based on applicable rules.
Who exercises shareholder rights in case of SPV ownership of shares?
SPV only exercises the rights related to the shares as one registered shareholder.
Can an SPV get dividends from its owned company?
Yes, SPV can get shareholder dividends based on applicable dividend and Tax rules.
Is it possible for an SPV to become shareholder through multiple ownership layers?
Yes, an SPV can form part of a multi-layered ownership structure in terms of beneficial ownership and disclosure necessities.
Does the investor still remain the ultimate owner when an SPV holds the shares?
Yes, the SPV holds the share but the investor remains the UBO.
