As 2020 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.
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.
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