With a dynamic blend of traditional legal prowess and up-to-date industry knowledge, our panel of experts is poised to guide you through the intricacies of establishing and managing both open-ended and closed-end funds using the Variable Capital Company (VCC) framework in Singapore.
Understanding Variable Capital Company (VCC)
The Variable Capital Company (VCC) represents a novel corporate entity framework tailored for collective investment schemes, be it open-ended or closed-ended. Enhancing the current set of investment fund structures, a VCC can be sculpted as an independent fund or as an overarching umbrella with multiple sub-funds. Crucially, each sub-fund functions with its distinct set of assets and liabilities, ensuring they remain isolated from one another.
Why Opt for VCC?
The VCC is increasingly popular with foreign investors because of various benefits:
- Operational and Tax Incentives: Gain from tax breaks and streamlined operations.
- Confidentiality: While operational transparency is maintained, investor details remain private.
- Flexibility: With its adaptable nature, VCCs can be tailored to a variety of investment strategies, ranging from hedge funds to real estate funds.
- Domicile Advantage: The structure encourages investors to not only manage but also domicile their funds right here in Singapore.
Navigating the Establishment of a VCC in Singapore
The establishment and management of VCCs in Singapore are anchored in the Variable Capital Companies Act 2018 and its subsidiary legislations. Effective from 14th January 2020, it mandates all VCCs to be under the stewardship of a Permissible Fund Manager. This manager must hold a pertinent capital markets services licence, ensuring the utmost adherence to Singapore’s rigorous financial regulations.
VCCs provide the dexterity to manage diverse investment portfolios, either as independent funds or umbrella structures with multiple sub-funds. Such flexibility can result in significant operational cost savings. Moreover, while the VCC offers an avenue for dividends to be paid out of capital, providing robust financial flexibility, it simultaneously ensures investor confidentiality by keeping the shareholder register private.