Special purpose entities (SPEs) are:
(1) generally organised or established in economies other than those in which the parent companies are resident; and
(2) engaged primarily in international transactions but in few or no local operations.
SPEs are defined either by their structure (e.g., financing subsidiary, holding company, base company, regional headquarters), or their purpose (e.g., sale and regional administration, management of foreign exchange risk, facilitation of financing of investment).
SPEs should be treated as direct investment enterprises if they meet the 10 percent criterion. SPEs are an integral part of direct investment networks as are, for the most part, SPE transactions with other members of the group.