Launch of the Variable Capital Company (VCC) Framework in Singapore

What is the VCC?

The Variable Capital Company (VCC) is a new corporate structure specifically designed for investment funds in Singapore. Launched by the Monetary Authority of Singapore (MAS), the VCC framework provides a flexible and tax-efficient vehicle for fund managers to domicile their funds in Singapore.

The VCC can be used for both open-ended and closed-end funds, and can be structured as a standalone fund or as an umbrella structure with multiple sub-funds. Each sub-fund's assets and liabilities are segregated from those of other sub-funds within the same VCC.

Key Features of the VCC

The VCC offers several advantages over traditional fund structures. It can issue and redeem shares without shareholder approval, providing operational flexibility for open-ended funds. Its financial statements can be prepared according to internationally recognised accounting standards, not just Singapore standards. And the umbrella structure allows multiple sub-funds to be managed under a single legal entity, reducing administrative costs.

Tax Benefits

VCCs can benefit from Singapore's existing tax incentive schemes for funds, including the Section 13R and Section 13X tax exemption schemes (now known as Section 13O and 13U respectively). These schemes provide tax exemptions on specified income derived by qualifying funds managed by Singapore-based fund managers.

Re-domiciliation

The VCC framework also allows overseas funds to re-domicile to Singapore as VCCs, providing an attractive option for fund managers who wish to consolidate their fund administration in Singapore.

CorpXervices works with fund managers and family offices to set up and administer VCC structures. Contact our team to discuss how the VCC framework can benefit your fund operations.