payments on the loans, these loans need to be legally separated from the other obligations of the bank. This is done by creating an SPE, and then transferring the loans from the bank to the SPE. Risk sharing: Corporates may use SPEs to legally isolate a high risk project/asset from the parent company and to allow other investors to take a share of the risk. Finance: Multi-tiered SPEs allow multiple tiers of investment and debt. Asset transfer: Many permits required to operate certain assets (such as power plants) are either non-transferable or difficult to transfer. By having an SPE own the asset and all the permits, the SPE can be sold as a self-contained package, rather than attempting to assign over numerous permits. To maintain the secrecy of intellectual property: For example, when Intel and Hewlett-Packard started developing IA-64 (Itanium) processor architecture, they created a special-purpose entity which owned the intellectual technology behind the processor. This was done to prevent competitors like AMD accessing the technology through pre-existing licensing deals. Financial engineering: SPEs are often used in financial engineering schemes which have, as their main goal, the avoidance of tax or the manipulation of financial statements. The Enron case is possibly the most famous example of a company using SPEs to achieve the latter goal. Regulatory reasons: A special-purpose entity can sometimes be set up within an orphan structure to circumvent regulatory restrictions, such as regulations relating to nationality of ownership of specific assets. Property investing: Some countries have different tax rates for capital gains and gains from property sales. Letting each property be owned by a separate company can mean a lower tax bill. These companies can then be sold and bought instead of the actual properties, effectively converting property sale gains into capital gains in order to pay less tax. Types Securitization A real estate mortgage investment conduit (REMIC), used for the pooling and securitization of mortgage loans for mortgage-backed securities. A financial asset securitization investment trust (FASIT), a defunct entity used for securitization of any debt for asset-backed securities. An Irish Section 110 Special Purpose Vehicle (SPV) (S110 SPV), the largest SPV in the EU for securitisation. Investment A real estate investment trust (REIT), a tax designation for a corporate entity investing in real estate for the purpose of reducing or eliminating corporate tax. Establishment Like a company, an SPE must have promoter(s) or sponsor(s). Usually, a