Special Purpose Vehicles

There are many ways to construct a successful deal in China; however, there is a strong preference for domestic companies (and investors) to set up joint venture companies as special purpose vehicles (SPV).

There are a number of reasons for this preference, including:
– Joint ownership of IP and joint control of its exploitation as forms of risk sharing
– The desire to fully fund the approval and commercialization of a product in lieu of significant upfront payments
– Legal options to acquire equity in the ex-China parent company via the SPV
– Burden associated with moving money outside of China

There are a number of reasons why an SPV should be considered (rather than a regular licensing agreement), including:
– Oversight and influence over the project in China
– Ability to maintain control over the use and protection of  IP
– Establishment of a corporate asset with high growth prospects
– Development of a close relationship with a partner that may provide a monetization or exit option

Working with TPP Healthcare:
Our local team ensures that you are well supported throughout the entire SPV setup process by arranging the following: legal counsel for contracting and IP protection review, accounting firms for financial due diligence, and market intelligence on your partner.

If the SPV is part of a licensing deal, we seek to be compensated under our regular terms. If unrelated, TPP provides all the necessary local support through a competitive consulting retainer.

Connect with us to discuss special purpose vehicles.