DIFC Showcases Special Purpose Companies Opportunity at Knowledge Series Event

Dubai International Financial Centre (DIFC), hosted its first Knowledge Series event for 2012, highlighting the value of Special Purpose Companies (SPC) and their role in enabling structured finance transactions as well as the procedures and legal considerations involved.

The session, which took place in DIFC, outlined how the DIFC Special Purpose Company is an increasingly popular vehicle for use in structured finance transactions in the Middle East. Incorporated under DIFC law, SPCs enjoy the benefits of no foreign ownership restrictions and limited liability – all within a zero tax environment situated in the heart of Dubai and close to key markets, financial institutions and advisers. SPCs also enjoy the certainty afforded by DIFC’s internationally-oriented legal and regulatory system, including its sophisticated regime for the registration and enforcement of security, and access to the jurisdiction of the DIFC Courts.

In his opening remarks, Abdulla Mohammed Al Awar, CEO of DIFC Authority, said, “Special Purpose Companies are a practical tool for structured finance transactions, both for conventional and Islamic structures in private and public sector. In providing such world-class financial infrastructure, we have created many exciting opportunities for our clients and region as a whole.”

The panel discussion which followed, was moderated by Kevin Birkett, Head of Financial Services & Business Relations, DIFC Authority, and included Kai Schneider, Partner, Latham & Watkins LLP; Oliver Simpson, Associate, Latham & Watkins LLP; and James Martinson, Senior Vice President, Maples Fund Services.

The panel opened their discussion by defining an SPC as a type of private company limited by shares which may be incorporated in DIFC in accordance with Companies Law No. 2 of 2009 of the DIFC (the “Companies Law”); DIFC Companies Regulations of 2009; and Special Purpose Company Regulations of 2008 of the DIFC (the “SPC Regulations”). The session included an elaborated discussion on the benefits of using an SPC, and an explanation of its legal requirements and restrictions. The process of incorporation was also discussed during the session, with all inquiries attended to. The session concluded with the story of SPCs so far and their progress during the past few years, with a case study used for illustration.

The Knowledge Series is an initiative by the DIFC intended to create dialogue between industry experts and DIFC members comparing about interesting topics in the world of finance. Nine sessions have been held to date covering topics including captives, family offices, Islamic finance, funds regime, bonds and sukuk, private equity, capital markets and SPCs. Knowledge Series sessions are held regularly by DIFC to raise awareness about its infrastructure and opportunities and how DIFC clients can take maximum advantage from their presence in the centre and support DIFC’s continuing evolution as a global financial hub.