A SPV company refers to a special purpose vehicle, which is incorporated for securitisation transactions. At the moment, a German SPV can address to all participants on the local market. The special purpose vehicle can be set up in Germany under the True Sale Initiative platform, incorporated in 2005. The main characteristic of a SPV is that it represents a subsidiary of a local or foreign company which can carry on with its activities even in the situation in which its parent company becomes bankrupt and our lawyers in Germany can provide more details on the legislation regulating the incorporation and activity of a German SPV.
| Quick Facts | |
|---|---|
| Structures for securitization transactions | – true sales, – synthetic securitization (sale of derivatives). |
True securitization | True sales imply the creation of an SPV in a country with favorable taxation followed by its self-refinancing through loans or notes. |
Synthetic securitization | In synthetic securitization, banks use derivatives for regulatory risk transfers, enabling the SPV to hedge interest rates and exchange risks. |
| Possibility for parent companies to set up SPVs in other jurisdictions (YES/NO) | Yes, in most cases other EU countries are chosen. |
| Foreign jurisdiction selection criteria | – taxes, – maintenance costs, – setup requirements. |
| Credit enhancement availability (YES/NO) | Yes, German securitization vehicles can benefit from credit enhancements. |
| Types of credit enhancements | – subordination, – cash reserves, – over-collateralization, – credit insurance. |
| Parties involved in securitization transactions | – issuers, – sponsors, – sellers, – underwriters, – trustees, – investors. |
| Disclosure regulations applicable to securitization transactions (YES/NO) | Yes, at EU level. |
| Investor protection availability (YES/NO) | Yes, protection is available for institutional investors. |
| Possibility to sell financial instruments to other types of investors (YES/NO) | No. |
| Types of financial SPVs | Refinance intermediaries and refinance enterprises, under the German Banking Law. |
| Possibility to create “orphan SPVs” | Yes. They are usually created by service providers. |
| Features of an orphan SPV | The share capital of orphan SPVs is held by trusts or foundations created for charitable purposes. |
| EU regulations to abide by (if any) | Yes, German SPVs must comply with the European Central Bank and Eurosystem monetary policy legal frameworks. |
Table of Contents
Legal entities of a German SPV
Those who want to establish a special purpose vehicle in Germany can register the company under one of the legal entities available here. The SPV can take the form of a limited partnership, limited liability company or corporation, but it is important to know that most of the German SPVs are registered as a limited liability company, which represents the most common type of business registered in Germany due to the advantages provided to the shareholders, on which our German law firm can offer an in-depth presentation.
Register a SPV in Germany
The SPV has a different registration procedure compared to the general incorporation measures applicable to commercial companies and in this case, it is advisable to receive legal advice from a German lawyer, as there are specific requirements to complete.
The procedure starts by signing an agency agreement, which is used to offer a schedule for the respective investment project. Further on, the investors should draft the articles of associations and to choose a trading name for the company. The procedures can be completed at the Chamber of Industry and Commerce.
The statutory documents of the SPV will have to be notarized at a public notary in Germany. Further on, the investors will have to appoint two directors and to register the company with the local Trade Register, which is the last step in legally recognizing the incorporation of a SPV.
We also have an infographic on this topic:
Businessmen who need further information referring to the registration of a SPV in Germany are invited to contact our German law firm for legal representation.
Regardless of the business form you choose to incorporate in Germany, our team can answer questions about taxation. Working with out team of German accountants allows investors to maintain proper books, as well as prepare the annual financial statements accordingly. Moreover, our team will also assist with issues concerning taxes for employees, as well as the payment and the needed filings for other types of taxes.