In Dubai real estate, it’s not unusual to find that the owner of a high-value property isn’t an individual but an entity – specifically, a Special Purpose Vehicle (SPV). In simplest terms, an SPV is a standalone company created to hold a single asset – whether that’s a Downtown penthouse, a waterfront villa on the Palm, or a major development plot. It doesn’t trade or operate as a business; it simply holds the asset and ring-fences it from wider liabilities. When structured correctly, an SPV can simplify ownership, streamline future transfers, and offer greater flexibility around succession, taxation, and joint holding. While it’s not something most buyers need to think about, it’s a helpful framework for complex deals in the top end of the market.
SPVs: When and Why Are They Used?
There are several reasons a buyer may opt to purchase property through an SPV. For some, it’s about simplifying the ownership model – especially where multiple parties are involved, such as family members, investment partners, or offshore trusts. Other times, it can support more efficient succession planning or facilitate a smoother transfer of ownership in the future. For most buyers, however, the crux is the isolation of liabilities. Because the entity is legally distinct from its owners, any risks tied to the property – be it operational, legal, or financial – are contained within the SPV. This is particularly relevant in cases where the asset forms part of a wider portfolio, or where long-term planning and protection are a priority.
While the structure itself is straightforward, the way it’s applied can vary depending on the asset and the owner’s objectives.
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Holding High-Value Assets
One of the most common uses of an SPV is to hold a single, high-value property. This is especially relevant for buyers who want to keep their real estate separate from personal or operating assets, whether for liability reasons or otherwise. It’s also a more discreet way to manage ownership, as the SPV name appears on the title deed rather than an individual’s.
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International Ownership and Tax Planning
SPVs are particularly useful for international buyers coming from jurisdictions with complex or strict tax structures. Rather than holding property in their own name, many choose to acquire real estate through an SPV registered in a jurisdiction like DIFC or ADGM, both of which allow 100% foreign ownership. This structure supports long-term planning without disrupting how wealth is managed elsewhere, and it can minimise friction when repatriating profits or transferring the asset later down the line. The result is a cleaner, more flexible setup that’s easier to manage over time.
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Investment Pools With A Clear Exit Strategy
A more interesting use case for a real estate SPV is to pool together funds from multiple investors. Rather than navigating joint ownership agreements – which can get complicated quickly – investors contribute capital to a single SPV, which is then used to acquire and hold the property. This setup is common among private syndicates, family offices, and boutique real estate funds targeting trophy assets. Because each investor holds shares in the SPV – not the property itself – the exit strategy tends to be simpler, usually done by selling shares rather than transferring the title. It’s a cleaner, more manageable way to structure group ownership without getting bogged down in legal logistics.
Just as importantly, SPV ownership through pooled capital supports a more diversified investment strategy, opening the door to high-value assets that might otherwise be out of reach for individual investors.
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How Developers Use SPVs in Dubai
SPVs are standard practice in Dubai’s development market, especially for larger projects. Most branded residences, high-rise towers, and mixed-use communities are structured through their own dedicated SPVs, separate from the developer’s main business. That entity becomes the centre point for everything, from land acquisition and construction contracts to operator agreements and project financing.
There are several benefits to this: risks are isolated, and it becomes easier to manage timelines, budgets, and partnerships. If more equity needs to be raised or a co-developer is brought on board, the SPV also provides the mechanism for doing so without affecting other parts of the developer’s business. Once the project is complete, the SPV may remain in place to manage ongoing operations, or it may be wound down, depending on the structure.
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Key Considerations and Risks of Using an SPV
While SPVs offer practical benefits, they’re not a one-size-fits-all solution. The structure only works if it’s set up correctly and maintained with the same care as the asset it holds. The first decision is jurisdiction. In Dubai, SPVs are commonly set up in DIFC, ADGM, or JAFZA, but each free zone operates differently. DIFC and ADGM both follow English common law, making them a natural fit for international buyers familiar with UK-style legal systems. They offer 100% foreign ownership and are widely used by private wealth structures, family offices, and institutional investors. Both also require annual filings and – in ADGM’s case – audited financials, which supports transparency but adds some cost and complexity.
JAFZA, by contrast, operates under UAE commercial law and typically suits buyers already doing business in the UAE. Its compliance requirements are lighter, but it offers less flexibility when it comes to layered structures, trusts, or nominee arrangements.
Beyond setup, SPVs come with ongoing costs, including licensing, renewals, and basic regulatory compliance. These aren’t overly burdensome, but they do need to be managed mindfully. Buyers should also be aware of global disclosure obligations, especially under regimes like CRS and FATCA, which require proper reporting of foreign-held entities.
And finally, if a property is being acquired through an existing SPV, it’s essential to do thorough due diligence – not just on the asset, but on the company itself. Outstanding debts, shareholder disputes, or unpaid liabilities can sit within the entity, even if the property appears clean.
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Final Thoughts – Contact Us
If you're thinking of investing in prime or super prime real estate in Dubai, our expert advisers are here to help. Please reach out to Dubai Sotheby’s International Realty for tailored guidance that aligns with your goals – both now and long-term.
