Special Purpose Vehicles are also called Special Purpose Entities or “Project Companies” and created to realize a certain project or goal. Usually this company is a subsidiary company, which is established for one investment project realization, for developing a new business direction or for various temporary objectives.
One of the stock themes of using the special purpose entities is risk isolation. Normally companies try to separate risky activities from other activities and valuable assets. As a result a company can be established for every separate activity.
If necessary, the Special Purpose Vehicle can be leased. The leased companies are usually used for receiving commission and agency fees, or for providing transit procedures in a revenue intensive transaction.