Open SPV Company in Australia

Foreign investors can open a SPV company in Australia. SPV stands for Special Purpose Vehicle and it defines a company that is specifically set up for a type of activity, not for general business operations, as is the case of commercial legal entities.

In Australia, businessmen can open a SPV under 3 main types of companies. Our consultants can help you set up a company in Australia as an SPV and complete all the required registration formalities, which are done through the Australian Securities &Investment Commission (ASIC), the same institution in charge with the registration of other legal entities.

What types of SPVs are available in Australia?

According to ASIC, investors can open a SPV company in Australia under one of the 3 types of entities that can operate as an SPV. The 1st one is the Superannuation Trustee Company. This is incorporated following the provisions of the Section 19 of the Superannuation Industry (Supervision) Act 1993.

This type of SPV company has the main purpose of acting as a trustee for superannuation funds. Unlike commercial companies, this SPV is not allowed to distribute profit to its founders (property can’t be distributed to the members of the company as well – these provisions have to be included in the founding document of the SPV company).

Therefore, those who want to open a company in Australia for personal financial gain have to seek other legal entities as alternatives. The 2nd option for the setup of an SPV company is the Home Unit Company.

This entity is recommended for incorporation when a group of people, living under the same property (such as a block of flats), want to administer the property, its costs and other matters. This structure can also be used by those who own a property divided into several or more households.

It must be noted that a Home Unit Company has to be incorporated as a proprietary company, one of the legal entities available for incorporation for commercial purposes as well. Our specialists in company incorporation in Australia can assist investors with in-depth advice on the registration requirements imposed for this legal entity.

The 3rd option for an SPV company is the Not-for-Profit Company. The purpose of this entity is to develop activities that are not designed for profit, as the name suggests. This entity can be set up for a variety of charitable purposes and, just like in the case of the 1st type of SPV company, the founding document must restrict the distribution of income to members or directors.

Other types of business purposes of an SPV in Australia

Besides the activities presented above, an SPV can be incorporated in Australia for the following:

1. investments in startup businesses – the SPV can be registered for raising funds for a startup business, so that investors can minimize investment risks;
2. joint venture – through this, 2 different companies can develop an investment project without having to merge their business activities;
3. holding tangible or intangible assets – the SPV can also be incorporated (by individuals or other companies) for managing the assets they own.

Incorporation obligations for Australian SPVs

The process of setting up an SPV company is similar with the one of company incorporation in Australia for commercial companies. The founders must take all the steps for its registration and draw and sign the founding document of the SPV. In the list below, you can discover some of the main registration formalities:

• investors can open a company in Australia as an SPV following either the rules of the Corporations Act 2001 (the replaceable rules), either it is set up by signing a constitution, either a combination of the 2 options;
• the constitution must be prepared prior to actually completing the registration process and, according to the Section 139 of the above-mentioned Act, members can obtain a copy of the document in maximum 7 days since they have made the request;
• the constitution must also abide by the rules of the Corporations (Review Fees) Regulations 2003;
• in order to announce ASIC on the fact that the company is an SPV, company owners must submit 1 of the 3 declarations – Home Unit Company Declaration, Not-for-Profit Company Declaration or the Superannuation Company Declaration.

What other legally binding documents may be necessary for an SPV?

Besides the constitution, through which the SPV gains legal recognition, its founders may need to draft and sign other documents and agreements, which will vary based on the type of SPV that will be incorporated.

For instance, in the case where the process of company formation in Australia is initiated by 2 different businesses which plan to establish a joint venture, it is necessary to sign a joint venture agreement, in which the parties will outline the rights and obligations they have and the decision-making rules each one will be responsible for.

Individuals who will opt for an SPV registered as a trustee company must sign a trustee deed. There are other documents that may be needed, such as:

1. property purchase contracts;
2. investment agreements;
3. shareholder agreements.

Our consultants can offer legal advice on the provisions that must be included in each type of document.

Does the SPV need an Australian Business Number?

Although the SPV is different in its nature than a commercial company, the process of company incorporation in Australia is the same. This is why the SPV needs to obtain an Australian Business Number (ABN) through the services of the Australian Business Register.

It must be noted that SPVs operating as non-for-profit entities may be required to register with Australian Charities and Not-for-profits Commission.

Our consultants can offer assistance on the requirements and procedures that must be met for entities that have to be registered with this institution as well as with any other authority that can be involved in the registration and supervision of SPVs in Australia.

What happens when the SPV reaches its goal?

As presented above, the process of company formation in Australia for an SPV is completed so that investors can isolate risks that can appear when making an investment project. The SPV is registered for a single business purpose and, once achieved, the company will enter the liquidation process.

We invite you to contact our consultants if you need more details on how to set up a company in Australia as an SPV. Additionally, you can also contact us if you want to purchase a shelf company in Australia.