Financial Glossary

Special Purpose Vehicle (SPV)

Definition

A Special Purpose Vehicle (SPV) is a separate legal entity created for a specific financial transaction or business purpose, often used for investment structuring, risk isolation, or securitization.

Related Services

SPVs are commonly used in venture capital, real estate investments, and securitization of assets.

Problem and Application

While SPVs offer liability protection and operational flexibility, they can be complex to manage and may pose regulatory or tax challenges.

Conclusion

SPVs are essential tools in financial structuring but require careful legal and financial oversight.