A Special Purpose Vehicle (SPV) is a separate legal entity created to fulfil a temporary business purpose or undertake a limited and specific business activity. SPVs can be used to fund, purchase, and sell stock held on the off-balance sheet to limit responsibility and isolate financial risk.

SPVs are designed as bankruptcy-resistant entities. It is deemed isolated if the parent firm goes insolvent and bankrupt. This is done by ring-fencing assets and liabilities.