Singapore’s VCC Regime

Designed to meet the diverse needs of modern investors

Unlocking the Potential of Singapore’s Variable Capital Company

Launched in January 2020, Singapore’s Variable Capital Company (VCC) has revolutionised Singapore’s standing as a global hub for investment funds. The VCC structure offers a flexible, highly-regulated structure with potentially very attractive tax incentives. The country’s regulators have designed this offering to challenge other global financial centres and position Singapore as an ideal destination for fund domiciliation.

Why Should Investors Consider the VCC?

The VCC is designed to meet the diverse needs of modern investors. It allows for the creation of either a single fund or an umbrella structure with multiple sub-funds, and these can be open-ended or closed-ended.

With the flexibility to redeem shares and pay dividends from net assets or capital, it provides investors with unmatched adaptability.

The sub-funds are arranged to achieve legal separation, meaning independent ownership of assets and liabilities.

The VCC structure also ensures discretion, as the financial statements and shareholder registers are not disclosed to the public. Foreign funds can even re-domicile to Singapore under this structure, enhancing cross-border investment opportunities.

Key Advantages for Investors:

Flexibility

Whether you’re investing in traditional or alternative fund strategies, the VCC allows for the setup of a multi-fund structure, tailored to your investment objectives.

Privacy

Unlike other investment vehicles, a VCC ensures investor privacy by keeping financials and shareholder information confidential.

Tax Incentives

Investors can take advantage of Singapore’s various tax incentives, extended to VCCs, which enhance overall returns.

Why VCC Makes Sense for Families

Cost Efficiency – VCCs benefit from economies of scale by sharing resources such as fund managers and service providers, reducing operational costs.

No Minimum AUM – Unlike SFOs, which require a minimum asset under management (AUM) of SGD 20 million, VCCs have no such requirement, making them accessible to families with smaller portfolios.

Speed of Setup – While an SFO can take over 12 months to establish, a VCC can be set up within just a month.

Tax Benefits – With access to Singapore’s extensive network of tax treaties, VCCs enjoy tax efficiencies that help safeguard international investments and eliminate double taxation on foreign income.

Welcoming External Investors – A VCC allows families to pool resources with external investors, raising capital for specialised investment themes. This opens up opportunities for greater diversification and growth. The assets and liabilities of the sub-funds can be separated to ensure legal financial separation.

Privacy and Discretion – VCCs provide for investor names and financial statements to remain private, offering a level of confidentiality not available with SFOs.

Regulated and Compliant – As a regulated entity, the VCC in expected to adhere to high compliance standards, with professional fund managers ensuring transparency and safeguarding investments. At 42 Wealth Management, we take care of all compliance reporting and regulatory matters, so you can focus on your investment goals.

Photo by Alberto Casetta on Unsplash

Conclusion

In today’s complex financial landscape, the VCC is a smart, future-proof option for investors and families seeking a flexible, efficient, and compliant structure for wealth management. Explore how the VCC can meet your investment needs with the expert guidance of 42 Wealth Management.”

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