Our company formation agents in India specialize in facilitating the establishment of Special Purpose Vehicle (SPV) companies tailored to your specific needs. Our team adeptly navigates the regulatory landscape to ensure compliance and efficiency, whether you are setting up an Indian SPV for securitization, asset transfer, risk management, or fundraising.
Our agents provide comprehensive support throughout the incorporation process, from drafting legal documents to liaising with regulatory authorities, ensuring an expedited establishment of your SPV company in India.
How to open a SPV company in India
Establishing an SPV in India involves key considerations regarding its relationship with the sponsoring company and its independence as a separate legal entity. Just like a conventional company, an SPV requires promoter(s) or sponsor(s), typically the parent company, to initiate its formation. However, despite this affiliation, an SPV functions as a distinct legal entity, ensuring that the assets and activities of the parent company remain insulated from the ups and downs of the SPV’s operations.
Here is a step-by-step guide regarding setting up a SPV in India:
- Determine the type of legal entity suitable for the SPV.
- Reserve a unique name for the SPV with the Registrar of Companies (ROC).
- Prepare the necessary documents and file them with the ROC with the help of our agents.
- Obtain the Certificate of Incorporation from the ROC.
- Apply for the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the SPV.
- Open a bank account for the SPV with the assistance of our experts.
- Register for Goods and Services Tax (GST), if applicable.
- Fulfill any other regulatory requirements specific to the industry or business activities of the SPV.
The services of our company formation agents in India are at your disposal if you want to learn in detail about the procedure.
Exploring the types of Special Purpose Vehicles (SPVs) in India
An SPV, is a legal entity created for a specific and often temporary purpose. It is typically established to isolate financial risk and protect the parent company or investors from potential losses associated with the SPV’s activities. They are utilized in situations where regulatory, tax, or accounting considerations necessitate the segregation of certain assets or liabilities from the parent company’s balance sheet.
Types of Special Purpose Vehicles (SPVs) in India serve diverse functions, each tailored to specific needs and regulatory frameworks. Our specialists can guide you through incorporating these SPV types effectively:
- SPVs by Foreign Institutional Investors (FIIs): Foreign companies often utilize SPVs to enter Indian markets, particularly in sectors restricted under automatic routes. By forming SPVs in India, foreign investors can navigate regulatory hurdles and gain access to Indian markets with more flexibility.
- SPVs for securitization by banks/financial institutions: Banks and financial institutions often establish SPVs to securitize assets such as loans and receivables. These SPVs create a separate entity that raises debt backed by these assets and their future cash flows.
- Government-formed SPVs under PPP: Government entities are increasingly forming SPVs for specific projects, especially in infrastructure development. These Public Sector Undertakings (PSUs) collaborate with Central and State Governments, as well as private sector participants, to create entities that facilitate project execution and regulatory approvals.
- Real Estate Investment Trusts (REITs): The emergence of SPVs in India has paved the way for REITs, offering a new investment avenue for real estate. Like mutual funds, REITs aggregate funds from numerous investors, utilizing real estate assets as the underlying investment.
Our Indian company formation specialists can assist you in navigating the legal, regulatory, and operational aspects of incorporating and utilizing these SPV types effectively in your business endeavors. They can also help you with company registration in India.
Besides the information about the types of SPVs, if you are looking for accounting services in India, we can assist you. Our experts provide invaluable assistance with SPV accounting, ensuring meticulous recording of financial transactions, accurate preparation of financial statements, and adherence to regulatory standards.
Taxation of SPVs in India
Understanding the taxation implications is paramount when planning to set up a company in India, such as a Special Purpose Vehicle (SPV). Specifically, SPVs engaged in activities like real estate or infrastructure investments are subject to taxation on their profits as business income.
Find information about SPV taxation provided by our company formation specialists in India:
- Tax rate is 25% plus surcharge and cess or a concessional rate of 22% plus surcharge and cess if opting for a lower tax regime (as per Sec 115BAA);
- Eligible for tax reliefs including Sec 80IA and other applicable tax benefits.
As company formation agents in India, we offer a comprehensive range of practical services beyond taxation guidance. If you have questions or concerns about payroll management in India, we can provide expert assistance.
Our services include handling payroll processing, ensuring compliance with local labor laws and regulations, calculating salaries, managing employee benefits, and addressing any payroll-related queries you may have. Whether you are recently opening a company in India or already an established company, our team can tailor payroll services to meet your specific needs.
With our knowledge and experience, you can navigate the complexities of SPV setup in India, optimizing the process for maximum efficacy. Contact our company incorporation consultants in India for support.