Application for Venture Capital Fund Manager (VCFM) Licence

Application for Venture Capital Fund Manager (VCFM) Licence

Venture Capital in Singapore

Venture capital ("VC") is a subset of PE that includes investments in high-growth, high-risk companies, usually high-tech. VC funds are usually organized as limited partnerships. VC fund managers tend to focus on technology-intensive, early-stage, high-risk companies. VC also does not include restructuring or leveraged buyout financing.

VC Market and Demand

The fund management industry in Singapore is growing rapidly.

Singapore is seen as a popular domicile for venture capital funds. Besides being a global leader in ease of doing business (Singapore ranked first for many years in a row), Singapore's stable pro-business environment, efficient legal system, and risk-based regulatory policies make it an attractive choice for asset management activities. Furthermore, with favorable income and corporate taxes, no capital gains tax, and favorable tax treatment for eligible funds, Singapore is ideally positioned to take advantage of the greater demand for investment solutions arising from continued wealth creation in Asia.

The Impact of VC on the Economy

The importance of VC as an alternative source of capital is clear. Young companies often struggle to get financing from traditional sources, as banks are less likely to lend to small businesses without collateral and a strong track record. VC addresses this "capital gap" by providing promising startups with the funding they need for the next stage of technology and business development. In addition, entrepreneurs have access to professional management skills, guidance, and strategic support from experienced venture capitalists.

In addition, VC is widely regarded as a powerful engine that can drive a country forward in innovation, job creation, knowledge economy, and macroeconomic growth. In the context of Singapore, the VC industry is very important to its economy because the country needs to transform into an innovation-driven, knowledge-based, and future-oriented country. As Singapore is constrained by its small geographic size and faces challenging labor constraints, future economic growth cannot be achieved by labor-led growth, but must be based on productivity and innovation. For Singapore to maintain its competitive edge in the global market, the economy must enter the next phase of value creation, in which VC plays a key role in encouraging this progress.

Singapore's VC Regulatory and Legal Framework

As part of a wider effort to facilitate corporate development financing, MAS has a simplified authorization process and regulatory framework for VC fund managers.

Fund Manager Regulation

In order to carry out fund management activities in Singapore, the fund manager (usually organized as a fund management company (“FMC”) must hold a Capital Markets Services (“CMS”) license issued by the Monetary Authority of Singapore, or be exempt from licensing requirements.

There are two types of CMS licenses that MAS can grant to FMCs:

1. licensed accredited/institutional FMC (which may serve unlimited accredited and institutional investors); or

   
   

2. licensed retail FMC (which can deal with retail investors).

According to the SFA, "accredited investors" are

(a) investors, including individuals with a net worth of more than S$2 million (the net worth of an individual's primary residence can only contribute up to S$1 million of the S$2 million threshold) or an annual income of not less than S$300,000, and companies that have assets exceeding S$10 million; or

(b) institutional investors (including pension funds, collective investment schemes, banks and statutory bodies).

A VCFM may only manage funds that meet the following criteria:

1. invest at least 80% of committed capital in securities that are directly issued by an unlisted business venture that has been incorporated for no more than ten years at the time of initial investment;

   
   

2. invest up to 20% of committed capital in other unlisted business ventures that do not meet sub-criterion (i), i.e., they have been incorporated for more than ten years at the time of the initial investment, and/or the investment is made through acquisitions from other investors in the secondary market;

   
   

3. must not be continuously available for subscription, and must not be redeemable at the discretion of the investor; and

   
   

4. are offered only to accredited and/or institutional investors.

Qualifying VC fund managers are not required to have directors and representatives who have at least five years of relevant fund management experience.

Under the regulatory framework for VC fund managers, VC fund managers are exempt from capital requirements and business conduct rules that currently apply to other fund managers. VC fund managers are also exempt from independent valuations, internal audits, and the requirement to file audited financial statements with MAS. As a safeguard, VC fund managers must disclose to their clients that they are not subject to the same regulatory requirements as other licensed fund managers.

Application for Venture Capital Fund Manager (VCFM) Licence | Bestar

Who needs Apply

Individuals performing key functions in a fund management company, such as portfolio construction and allocation, research and advisory, business development and marketing, or client servicing, are required to be representatives.

Admission Criteria

When assessing an application to be a VCFM, MAS takes into account factors such as:

• Fitness and propriety of the applicant, its shareholders, and directors.

• Track record and fund management expertise of the applicant and its parent company or major shareholders.

• Ability to meet the minimum financial requirements prescribed under the SFA.

• Strength of internal risk management and compliance systems.

• Business model/ plans and projections and the associated risks.

In addition, your company would need to operate from a dedicated and secure office space that is accessible only by your company’s directors and staff.

Financial Requirements

There is no minimum base capital or other financial resource requirements.

Staffing Requirements

Minimum of 2 full-time Singapore-based employees

Appointing Representatives

If you hire or appoint individuals to conduct a regulated activity under your licence, you have to appoint and identify these individuals as your representatives for that regulated activity.

Applying for Licensing or Registration

SECTION 1: INFORMATION ON THE COMPANY AND ITS SHAREHOLDERS

• Provide a business profile for the incorporation of the Company as filed with the Accounting and Corporate Regulatory Authority (“ACRA”) of Singapore.

• Provide an organisational chart of the Company.

• Provide the shareholding chart that shows how the Company is related to each of its shareholders (including natural persons), and to its related entity(s), subsidiary(s), and branch(s) (where applicable). Information on other forms of controlling interests should also be included in the chart. The chart should indicate the percentage of shareholdings or controlling interests held by each person, the date of incorporation, and the place of incorporation of each entity.

SECTION 2: INFORMATION ON THE COMPANY'S PROPOSED BUSINESS PLAN

• Provide a business plan of the Company (i.e., a brief description of proposed business model and outline of the activities, and the profile of key principals, including major shareholders).

• Provide details of fund(s) to be managed or advised: Name of fund, Place of incorporation/domicile, Appointed fund manager, Role of the Company, if not manager to the fund, Investment by sector, Geographical focus, Latest/Targeted AUM (S$)

• Set out details of any shareholdings where the individual owns 5% or more of the total number of voting shares in the business or corporation in Singapore or elsewhere: Name of entity, Place of incorporation/establishment, Nature of business, Related entity (Yes/No), Date of acquisition (DD/MM/YYYY), % shareholding in corporation

Processing Time

MAS expects to take not more than 4 months to review and process an application if the business model is straightforward, the applicant meets the relevant admission criteria fully, and the application is complete and clear.

Fees

There is a non-refundable application fee of S$1,000 upon submission of the application.

There will be an annual corporate fee of S$4,000 for the licence or registration status.

How Bestar Singapore Can Help

Securing a Venture Capital Fund Manager (VCFM) License in Singapore is a strategic move for managers focusing on early-stage startups. However, navigating the Monetary Authority of Singapore (MAS) requirements—even under the "simplified" regime—demands precision.

As of 2026, MAS has further refined its expectations regarding digital asset disclosures and environmental risk management. Here is how Bestar Singapore acts as your essential partner in securing and maintaining your VCFM status.

1. What is the VCFM License? (The "Answer-First" Summary)

The VCFM license is a specialized Capital Markets Services (CMS) license designed for venture capital managers. It offers a faster track to market by removing traditional requirements like minimum base capital and five-year track record mandates for directors.

Key Eligibility Criteria (2026 Update):

• Asset Type: At least 80% of committed capital must be in unlisted business ventures (incorporated <10 years at the time of initial investment).

  
  

• Investor Base: Limited to Accredited Investors (AIs) or Institutional Investors (IIs).

  
  

• Structure: Closed-end funds only (no discretionary redemptions).

2. How Bestar Singapore Streamlines Your Application

Applying for a license isn't just about filing forms; it’s about proving "substance" to MAS. Bestar provides a comprehensive end-to-end framework:

Pre-Application: Strategic Structuring

Bestar advises on the most tax-efficient setup, often utilizing the Variable Capital Company (VCC) framework. We help you determine if your investment strategy fits the 80/20 VCFM rule or if a full A/I LFMC license is required.

The Application: Drafting & Submission

MAS focuses heavily on the "Fit and Proper" criteria. Bestar assists with:

• Form 1 Preparation: Ensuring all disclosures regarding shareholders and directors are airtight.

  
  

• Policy Drafting: Developing mandatory AML/CFT (Anti-Money Laundering) manuals and Risk Management Frameworks.

  
  

• Business Plan Refinement: Articulating your investment thesis to meet MAS’s latest substantive activity guidelines.

Post-Approval: Operational Compliance

A license is a privilege, not a right. Bestar provides ongoing Corporate Secretarial and Tax Advisory services to ensure you meet:

• Annual Fees: Managing the S$4,000 fixed annual corporate fee.

  
  

• Audit Requirements: Independent auditors for mandatory annual filings.

  
  

• Regulatory Updates: Keeping your firm compliant with 2026 guidelines on Environmental Risk Management and AI Risk Management.

3. Comparison: VCFM vs. A/I LFMC

Deciding which license to pursue? Bestar helps you weigh these 2026 benchmarks:

Feature	VCFM License	A/I LFMC
Min. Base Capital	None	S$250,000
Track Record	Not strictly required	5+ years for key individuals
Investment Limit	80% in unlisted startups	Any (Liquid or Illiquid)
Compliance Function	Simplified	Robust / Dedicated

4. Why Use a Professional Consultant in 2026?

The regulatory landscape in Singapore is increasingly focused on transparency and digital integration. MAS now expects managers to have clear policies on digital asset valuations and cyber resilience. Bestar’s deep local expertise ensures your application isn't just "compliant" but "future-proofed" against these evolving standards.

Expert Insight: "In 2026, MAS is no longer just looking at financial figures; they are evaluating the 'operational resilience' of fund managers. Bestar bridges the gap between your investment vision and Singapore's regulatory reality."

Ready to launch your VC fund in Singapore?

Applying for a VCFM license requires a careful balance of speed and regulatory rigor. Bestar Singapore provides the technical expertise to handle the paperwork so you can focus on finding the next unicorn.

Preliminary Checklist of Documents You'll Need for Bestar Consultation

To move forward with Bestar Singapore on your VCFM license application, you will need to prepare a specific set of documents for our review. Under the 2026 MAS guidelines, the focus has shifted toward not just "who" is running the fund, but how the fund manages operational and environmental risks.

Below is a preliminary checklist to help you organize your initial consultation with Bestar.

VCFM License Application Checklist (2026)

1. Corporate & Structural Documents

• ACRA Business Profile: Must be a Singapore-incorporated company.

  
  

• Constitution (Memorandum & Articles of Association): Updated to reflect the specific venture capital nature of the business.

• Shareholders’ Agreement: Highlighting the ownership structure (especially any corporate shareholders or UBOs with >20% stake).

• VCC constitutive documents (if you are using the Variable Capital Company framework).

2. Key Personnel (The "Fit & Proper" File)

MAS requires a minimum of two directors (at least one must be a full-time Singapore resident).

• Detailed CVs: Focusing on relevant experience in venture capital, private equity, or fund management.

• Educational Certificates: Verified copies of degrees (e.g., your B.Com in Accounting is a strong asset here).

• Fit & Proper Declarations: Signed statements confirming no criminal record, bankruptcy, or professional misconduct.

• Employment Contracts: For the CEO and at least two full-time Singapore-based professionals/representatives.

  
  

3. Business Plan & Investment Strategy

• Investment Mandate: Clear evidence that at least 80% of committed capital will be in unlisted business ventures less than 10 years old.

• Target Market/Geography: Details on the sectors and regions you intend to invest in (e.g., SE Asia tech, Japan real estate tech, etc.).

• 3-Year Financial Projections: Estimated AUM, revenue from management fees, and projected operating expenses.

4. Compliance & Risk Frameworks

This is where Bestar’s drafting expertise is most critical:

• AML/CFT Manual: Tailored policies for Anti-Money Laundering and Countering the Financing of Terrorism (MAS Notice SFA04-N02).

• Risk Management Framework: Covering investment risk, liquidity risk, and Operational Resilience.

• NEW: Environmental Risk Management (ERM) Policy: Documents showing how you integrate environmental risk into your investment due diligence (mandated for asset managers in 2026).

• Cyber Hygiene Policy: Proof of compliance with MAS Cyber Hygiene requirements.

5. Official MAS Forms (Bestar will help finalize)

• Form 1 / Form 1V: The primary application for a CMS license as a VCFM.

• Form 3A: To notify MAS of the appointment of your representatives.

How Bestar specifically bridges the gaps

• Gap Analysis: We will review your current directors' profiles against MAS's 2026 competency benchmarks.

  
  

• Policy Customization: Instead of "templated" manuals, we tailor your AML and ERM policies to your specific investment niche (e.g., tech vs. manufacturing).

  
  

• The "Liaison" Role: Bestar handles the back-and-forth "Queries" from MAS officers, which often saves 2–3 months of processing time.

Request for Proposal (RFP)

Connect with Bestar

If you would like to know more about our services, please contact Bestar.