Our team of professionals will assist you to set up VCCs in Singapore. Advise on managing and
administering VCCs. We have made a brief note about VCCs for your perusal.
VCC- Variable Capital Company’s Act was introduced to manage funds and the act has come
into force w.e.f. January, 2020.
VCC is used as an “investment vehicle” for the purpose of wealth management or investment
management activities in Singapore. It can be used for both, as open ended or close ended fund
structure. It is a legal entity that can hold one or more listed investments as well as unlisted
investments. VCC is a corporate entity which is established in Singapore under the Variable
Capital Companies Act 2018 (“VCC Act”). The approval for incorporating a VCC as well as
registration of its sub funds (if any), is granted by the ACRA upon meeting prescribed
requirements under the VCC Act and regulations thereto. VCC shall be managed by a Permissible
Manager in Singapore.
“VCC” stands for Variable Capital Company, a fund entity in Singapore having a corporate form.
VCC is a type of legal entity to hold asset and investments for the purpose of engaging in wealth
management activities. VCC can sue and be used in its own name. VCC has to be managed by a
licenced wealth manager like EWM or a manager who is otherwise permitted by the Monetary
Authority of Singapore. Introduction of VCC regime is an effort of Singapore Government to
enable domiciliation of both fund and its Manager in Singapore. Subject to meeting prescribed
conditions, VCC can avail various incentives and benefits in Singapore, including tax exemptions.
Advantages and benefits
1) VCC’s flexibility to issue and redeem its shares, with operational ease.
2) Confidentiality- VCC’s Constitution, Annual Return filings, Register of Shareholders are
NOT available to public/3rd parties from the records of ACRA.
3) Can pay dividends out of capital, which gives flexibility to Managers to meet such
obligations
4) VCC’s capital is accounted on a fair value basis and its NAV = paid up share capital at all
times.
5) VCC’s capital structure will have, Management Shares carrying voting rights (no
dividend rights); and Participating Shares carrying NO voting rights (redeemable,
eligible for dividends- as and when declared)
6) Provides continuity, since VCC is a corporate entity (unlike a non corporate investment
vehicles)
7) Tax/financial incentives are available, subject to meeting specified requirements
8) VCC can obtain Certificate of Residence (COR) from IRAS, in its own name, unlike a unit
trust.
9) VCC, if structured well, it can be used as a legal entity for inter-generational wealth
transfer.
Primary conditions and criteria
1) VCC Sponsor and its directors shall be “fit and proper”
2) VCC is essentially established in Singapore under the VCC Act and regulations thereto.
3) Submission of prescribed application and requisite declarations are made to ACRA, for
seeking incorporation of the VCC
4) Assets and Liabilities of each sub fund are to be segregated, accounted for separately, ring
fenced and accounted for at fair value.
5) Mandatory appointment of Director(s), VCC Manager, Company Secretary and Auditor.
6) Custodian appointment becomes essential when the VCC is investing in listed, traded or
quoted securities.
7) AML and CFT guidelines of MAS are applicable to VCC.
8) Appropriate governance framework should be created for the day to day operations of
the VCC. This is critical for both VCC Sponsor and VCC Manager.