Modeled after similar corporate fund structures in global investment fund centres such as the the Cayman Islands, UK and Luxembourg, the Variable Capital Company (VCC) provides investment funds a new corporate structure that will encourage fund managers to domicile their funds in Singapore, which in turn will strengthen the nation’s full-service fund ecosystem.

Similar VCC structures have already been adopted by other jurisdictions in the region, so the passing of the VCC Bill in October 2018 is a much welcome game-changer for Singapore’s fund management industry.

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Flexibility to issue shares, redeem investments and pay dividends out of capital

VCCs are able to vary their share capital, without having to seek investors’ approval, thus allowing investors the flexibility to issue shares or exit their investments when they wish to do so. VCCs will also be able to pay dividends using capital, thus allowing investment funds to meet their dividend payment schedules agreed upon with investors.

The fund manager has a choice to establish the VCC as either a standalone fund, or as an umbrella fund with multiple sub-funds. This benefits the grouping of various structures under a single umbrella VCC.  The management of the assets and liabilities of each sub-fund, by law, are to be segregated, so that one sub-fund cannot be used to discharge the liabilities of the umbrella fund, or of another sub-fund.

Public access to VCC financial statements and investor/shareholders’ registers is specifically prohibited.

Assets must be managed by a fund manager duly registered, licensed or exempted by MAS. Hub is able to support you with the consultation for the set up and maintainance both for the fund as well as the VCC.

  • Traditional or alternative hedge funds
  • Retail or restricted funds
  • Standalone fund, or an umbrella entity with multiple sub-funds with segregated assets and liabilities

Classified as a corporate tax resident, VCCs’ profits are taxed at a flat rate of 17%. In addition, tax incentive schemes for Singapore funds such as the Enhanced-Tier Fund and Singapore Resident Fund Schemes will be extended to VCCs incorporated or domiciled in Singapore.

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