Special Purpose Vehicle

A Special Purpose Vehicle (SPV) is a separate legal entity created by a company to isolate financial risk. It’s used to carry out specific projects, such as financing a property or a large investment, without exposing the parent company to direct liability. The SPV acts independently, holding assets and liabilities related only to that project. This structure helps manage risks, improve financing conditions, and attract investors, as the SPV’s financial health is separate from the parent company’s. Once the project concludes, the SPV may be dissolved, minimizing ongoing financial impact on the original company.