VCC

Singapore Variable Capital Company (“VCC”)

The VCC is a corporate structure in which the issuance and redemption of its shares can be performed with great flexibility and ease. The new fund vehicle enables fund managers to create an umbrella structure and thus provides cost savings through economies of scale, as the sub-funds can have a common board of directors and service providers — such as the same fund manager, custodian, auditor, and administrative agent. We have the knowledge and expertise to assist you with your VCC setup tailor-made to your investment objectives.

A key advantage of the VCC is the use of the umbrella structure. This allows the sub-funds to share a board of directors and have common service providers, such as the same fund manager, custodian, auditor and administrative agent. Certain administrative functions, for instance the holding of general meetings and preparation of prospectuses, can also be consolidated. Where a VCC is set up as an umbrella fund with several sub-funds, members may hold shares that are referenced to a particular sub-fund held by the VCC.

Flexibility

A VCC may freely redeem its shares (without the requirement for solvency tests and corporate resolutions) and pay dividends using its net assets/capital, thereby providing flexibility in the distribution and return of capital.

Confidentiality

Subject to adhering to certain regulatory requirements, the register of members of a VCC is not required to be open for inspection by the public. Financial statements are also not publicly available.

Reduced Tax Compliance Burden

An umbrella VCC will only need to file a single corporate income tax return regardless of the number of sub funds the umbrella VCC has.

Easier to Meet the Needs of Different Investors

Apart from the Singapore Financial Reporting Standards, a VCC is permitted to prepare its financial statements using international accounting standards such as the International Financial Reporting Standards and the US Generally Accepted Accounting Principles.  This allows for greater flexibility to serve the needs of global investors.

Cost Efficiencies

The umbrella structure creates economies of scale as sub-funds can share the same board of directors and common service providers and consolidate some administrative functions.

Easier to Meet the Conditions for Tax Exemption under Section 13R and 13X of the Income Tax Act

The tax incentive conditions and the economic commitments under both incentive schemes will be applied to the umbrella VCC rather than to the individual sub-funds.

Different Strategies under One Roof

Fund managers are able to adopt open-ended and closed-ended investment strategies for different sub-funds within a single VCC entity.Tax Advisory

  • Formation
  • Grant Application
  • Tax advice and exemption application
  • Structuring
  • Office management
  • External audit
  • Fund administration

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