SPV Structuring for Private Equity & Real Estate
Special Purpose Vehicle (SPV) setup and administration for private equity fund investments and real estate asset holding in India — entity incorporation (LLP or Pvt Ltd), ring-fencing advisory, co-investment SPV framework under IFSCA consultation (controlling scheme must hold ≥ 50% of commitments), statutory accounts, audit, and ROC/MCA compliance.
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Why SPVs?
A Special Purpose Vehicle is a ring-fenced entity created for a single purpose — holding one asset, one portfolio company, or one deal. In private equity and real estate, SPVs serve three functions: (1) ring-fencing liability from the main fund, (2) enabling co-investor participation without restructuring the AIF, and (3) clean asset-level accounting and exit documentation.
PE fund SPV
One SPV per portfolio company — common in Category II AIFs to isolate liability and simplify exit documentation
Real estate holding SPV
Property held in LLP or Pvt Ltd for ring-fencing, ease of transfer, and tax efficiency on capital gain
Co-investment SPV
Enables AIF LPs to co-invest alongside the main fund in a single deal without joining the primary scheme
GIFT City co-investment SPV
IFSCA consultation framework: FME links an SPV to the controlling scheme (min. 50% commitment), one SPV per portfolio company
What We Do
- Entity selection advisory — LLP (preferred for real estate: pass-through, lower stamp duty on transfer) vs. Private Limited Company (preferred for PE: easier equity structuring)
- SPV incorporation with MCA — name reservation, MOA/AOA or LLP agreement, PAN, TAN, GST registration
- Shareholder/partner agreement advisory — economic rights, tag-along, drag-along, information rights, exit mechanics
- Co-investment SPV structuring — investor rights segregation, carried interest allocation at SPV level
- GIFT City IFSCA co-investment SPV setup: controlling scheme ≥ 50% equity/capital commitment, one SPV per portfolio company, leverage within PPM limits
- Asset injection and valuation — business valuation at the time of asset transfer into SPV
- FEMA structuring for SPVs with foreign investor participation — Form FCGPR, Form FCTRS, FLA filing
- Annual accounts preparation — P&L, balance sheet, notes, and statutory audit for each SPV
- Income tax return filing — Section 139, including pass-through income allocation to AIF investors
- Transfer pricing compliance for SPVs that transact with overseas group entities
- Exit documentation — share purchase agreement support, cap table clean-up, Form SH-4 / MCA filing on share transfer
- SPV strike-off or dissolution — where the investment is fully exited
Frequently Asked Questions
Should a PE fund use a company or an LLP for SPVs in India?
The choice depends on the asset type and exit strategy. LLPs are common for real estate because: (1) profit/loss pass-through without DDT, (2) lower stamp duty on LLP interest transfer vs. share transfer, and (3) no requirement to maintain a register of members. Private Limited Companies are common for PE investee SPVs because: (1) equity structuring with preference shares is cleaner, (2) FEMA filing for foreign investors is simpler via Form FCGPR, and (3) ESOP and secondary transactions are more standardised.
What is the IFSCA co-investment SPV framework?
IFSCA released a consultation paper on an SPV framework for co-investments linked to GIFT City fund management entities. Under the proposed framework, an FME with an existing controlling scheme can set up an SPV for co-investments into portfolio companies. The controlling scheme must hold at least 50% of the equity or capital commitments in the SPV. A distinct SPV is required for each portfolio company. Leverage at the SPV level must stay within the limits disclosed in the controlling scheme's PPM.
Does each PE fund SPV need its own statutory audit?
Yes. Each SPV is a separate legal entity and requires its own annual statutory audit under the Companies Act, 2013 (if a Pvt Ltd) or LLP Act, 2008 (if an LLP above the audit threshold). We coordinate multi-SPV audits in a single engagement with shared documentation and common workpapers across portfolio SPVs.
How is tax handled at the SPV level for an AIF investment?
For Category I and Category II AIFs, the pass-through tax treatment under Section 115UB of the Income Tax Act, 1961 applies at the AIF fund level, not the SPV level. The SPV is a normal taxable entity — it pays corporate tax on its profits. Only dividend distributions from the SPV to the AIF, or gains on the AIF's exit from the SPV, flow into the AIF's pass-through computation.
What Comes Next
Related Services
Regulatory
AIF & SEBI Compliance
Private equity AIFs often deploy into investee companies through SPVs. The SPV is an investee-level entity — separate from the AIF fund structure. We handle both the AIF registration and the underlying SPV incorporation and compliance.
Regulatory
GIFT City & IFSC Fund Setup
IFSCA has circulated a framework for co-investment SPVs linked to GIFT City fund management entities. The controlling scheme must hold ≥ 50% of equity or capital commitments in the SPV, and leverage must stay within the PPM limits.
Regulatory
FEMA / FDI Compliance
SPVs holding assets on behalf of foreign AIF investors require FEMA structuring — Form FCGPR on investment, Form FCTRS on transfer, and Annual Return on Foreign Liabilities and Assets (FLA). We handle all FEMA filings at the SPV level.
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See all 9 Alternative Investment Fund services in one place — AIF registration, PPM, accredited investor, angel fund, GIFT City, family office, compliance, and SPV structuring.