Simplifying Singapore Variable Capital Company (VCC)

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As 2021 continues to bring new regulations and structures, the global asset management space continues to evolve and APAC is no exception. Singapore is certainly a jurisdiction at the forefront of change in the Asian fund space with a total AUM estimated at S$3.3 trillion. On January 15, 2020, the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA) launched the Variable Capital Company (VCC),  a new corporate entity structure for all types of funds in the jurisdiction, namely the Variable Capital Company (“VCC”) in Singapore.

What is VCC?

In simple terms, this new entity can serve as a structure for both open and closed-ended investment funds in Singapore. It is a combination of a legal entity as well as a fund structure and can be used for mutual funds, hedge funds and private equity or real estate funds.

Under the VCC structure, several collective investment schemes can be established either as a standalone or umbrella entity with sub-funds. The launch of Singapore VCC, significantly enhances Singapore’s already strong positioning as an international fund management center.

To further boost industry adoption of the VCC framework in Singapore, the Monetary Authority of Singapore (MAS) also launched a VCC Grant Scheme which will help cover costs involved in incorporating or setting up a VCC. By co-funding up to 70% of expenses paid to Singapore-based service providers, the grant is roofed at S$150,000 for each application with a maximum of three VCCs per fund manager. As a result, during the period of the grant, it will be considerably cheaper to set up a VCC.

The grant scheme will be funded by the Financial Sector Development Fund (FSDF) and takes effect from Wednesday, 15 January 2020 for a period of up to three years.

Download VCC Guide
A comprehensive guide on Singapore’s Variable Capital Company (VCC)
What can VCC’s be used for?
  • Can be used for traditional funds and alternative fund strategies and therefore offer the ability to set up a multi-fund structure (both open ended & close ended).
  • Providing funds with an alternative to the existing structures available in Singapore, namely, unit trusts, limited partnerships, limited liability partnerships and companies.
  • Aims to give fund managers more pliability and cost savings while encouraging more funds to be domiciled in Singapore.

What are key advantages of VCC?
  • Flexibility: VCC does not dictate what you can or cannot invest in and can be used across open-ended or closed-ended funds. You have the agility to issue and redeem investments by investors, and pay dividends out of capital.
  • Discretion: It delivers privacy for investors by prohibiting public access to VCC financial statements and investor/shareholder registers.
  • Tax Transparency: Various tax incentive schemes available to Singapore funds are extended to VCCs.

How can Apex support you?

We have a team of close to 100 professionals based locally in Singapore who understand the market and deliver on-the-ground service and support.

Our local fund administration and corporate secretarial teams are ready to support your VCC incorporation, ongoing corporate secretarial and full fund administration.

Complete the form to get in touch with experts to discuss your requirements and assist you to incorporate a VCC.

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