Special Purpose Vehicles

An 'SPV', which is the initialism of ‘Special Purpose Vehicle’, is exactly what the name suggests: it is a vehicle created for a special purpose. An SPV is usually launched by one investor, or a limited number of investors, to hold a single asset for long-term investment.

SPVs are sometimes called a special purpose entity, investment holding company, personal investment company or something similar, but these are all simply another name for an SPV.

The ‘SP‘ of SPV – the special purpose – can be almost anything, but ‘special’ typically means the purpose is specific, limited or outside the ordinary scope of business.

The ‘V‘ of SPV – the vehicle – could be any kind of entity or legal arrangement, but a company is one of the most common types.

See our article on SPVs for more information.

SPVs are used by a broad range of people for an even broader range of reasons. The below are a few examples of who uses SPVs and why.

1. Individual Investors

   • To share a promising investment opportunity with their family, friends and wider network.

   • To diversify their portfolio by investing smaller amounts across a larger number of SPVs.

   • To pool money with other investors and meet a minimum investment threshold or acquisition price.

2. Aspiring Fund Managers

   • To make initial investments and build a track record.

   • To initiate discussions with potential investors and bring actual investment opportunities to the table.

3. Emerging and Established Fund Managers

   • To acquire and hold each portfolio investment of a Private Equity Fund or Venture Capital Fund.

   • To make an investment that falls outside their fund’s investment strategy (e.g. to avoid over exposure to a single investment).

   • To invest alongside others in a follow-on investment where their fund alone has insufficient capital.

4. Family Officers

   • To hold a unique asset that involves multiple segments of ownership (e.g. a yacht with equipment, employees, etc.) to simplify any future transfer.

   • To use for legitimate legal, tax, inheritance and other structuring.

5. Start-Up Founders

   • To pool investments from their friends, family and other early-stage investors.

   • To allow multiple smaller investors to combine their money and meet the minimum investment threshold, e.g. the amount required for a SAFE, KISS, CARE or other early-stage investment instruments.

   • To simplify their start-up’s corporate governance, administration and investor communications by combining different investor rounds and instruments into separate SPVs.

6. Financial Institutions and Institutional Investors

   • To retain decision-making over which deals to invest in, rather than relying entirely on a Fund Manager or other intermediaries.

   • To hold a specific asset that may be difficult to transfer and simplify any future transfer by selling the SPV.

The AuptiSPV is an SPV created using Auptimate’s online structuring tool. It is:

• Customisable by the user.

• Unique to a specific user’s needs.

• Cloud-native with all documents automatically generated, signed and stored online.

• Launched online in a matter of minutes.

• Managed via Auptimate’s online platform.

Auptimate handles an AuptiSPV’s incorporation, legal documents, investor onboarding, administration, accounting, tax, compliance, investor communications and other back-office functions – all on Auptimate’s online platform. We give investors the peace of mind to focus on what they do best: invest.

AuptiSPVs are typically formed as a private company limited by shares incorporated in Singapore. However, we work with customers who are interested in different types of entity, whether in Singapore or elsewhere in the world.

The Singapore Standard Industrial Classification (SSIC) is Singapore's national standard for classifying economic activities undertaken by economic units in the country. Every entity incorporated or registered in Singapore - including investment entities - must have at least one SSIC.

This information is primarily used by the Government for statistical purposes. It can also impact an entity's regulatory status (e.g. whether any additional licensed are needed) or tax status (e.g. whether any tax benefits may apply).

You can visit BizFile to perform a free SSIC search, or download the detailed definitions (PDF or Excel).

Which SSIC code should be used for an SPV will depend on its activities. We most often see the following SSIC codes for SPVs:

• Code: 64999
  Title: Other financial service activities, except insurance and pension funding activities n.e.c.
  Description: This category includes all other financial services not elsewhere classified in the SSIC. Examples of the activities classified under this code include:

  1. own-account investment activities, such as by securitisation companies, investment clubs, angel investors, etc.;

  2. writing of swaps, options and other hedging arrangements; and

  3. activities of viatical settlement companies.

• Code: 64300
  Title: Trusts, funds and similar financial entities (e.g. collective portfolio investment funds (excluding those with rental income))
  Description: This category includes legal entities organised to pool securities or other financial assets, without managing, on behalf of shareholders or beneficiaries. The portfolios are customised to achieve specific investment characteristics, such as diversification, risk, rate of return and price volatility. These entities earn interest, dividends and other property income, but have little or no employment and no revenue from the sale of services. Units in this category are primarily engaged in one or more of the following:

  1. open-end investment funds;

  2. closed-end investment funds;

  3. trusts, estates or agency accounts, administered on behalf of the beneficiaries under the terms of a trust agreement, will or agency agreement;

  4. unit investment trust funds;

  5. personal investment holding companies, units for holding and managing wealth of individuals and families; and/or

  6. business trusts with mainly dividend income.

• Code: 64202
  Title: Other Holding Companies
  Description: This category includes holding companies (e.g. real estate, construction, production, distribution) that hold the assets (owning controlling-levels of equity) of a group of subsidiary corporations and whose principal activity is owning the group. The holding companies in this category generally do not administer or manage the other businesses in which the equity is held.

• Code: 64201
  Title: Bank/Financial holding companies (including insurance holding company)
  Description: This category includes the activities of bank/financial holding companies, i.e. units that hold the assets (owning controlling-levels of equity) of a group of subsidiary corporations and whose principal activity is owning the group. The holding companies in this category generally do not provide any other service to the businesses in which the equity is held, i.e. they do not administer or manage other units.

If you need help choosing the right SSIC code, please contact us at help@auptimate.com.