Legal Link Between the Issuing SPV/SPC and the Asset
When the SPV/SPC is incorporated in a foreign jurisdiction, the local operating company (which owns or manages the underlying asset) must be legally linked to the token-issuing entity.
This is essential for regulatory compliance, investor protection, and the distribution of revenue.
Key Legal Agreements Connecting SPV/SPC with Underlying Asset
Asset Holding Agreement
Establishes the legal framework of the asset’s ownership.
Defines the rights, obligations, and transferability of the asset from the local entity to the SPV/SPC.
Revenue Distribution Agreement
Regulates how income is shared with token holders.
Defines the distribution of rental income, dividends, or profit-sharing mechanisms between the local entity and the SPV/SPC.
Management Agreement
Defines operational control and asset maintenance responsibilities.
Specifies whether the local entity retains operational control or transfers it to a third-party management company.
Regulatory Compliance Framework
Ensures adherence to domestic and foreign financial regulations.
Outlines investor reporting requirements, KYC/AML procedures, securities compliance, and tax obligations.
These agreements ensure clear ownership rights, enforceable investor protections, and transparent financial operations.
Example: A real estate developer in Germany tokenizes a residential property portfolio through a Liechtenstein SPV. The SPV issues security tokens, while a Revenue Distribution Agreement ensures that rental income is transferred to the SPV for distribution to token holders.
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