Your Ultimate Guide to Opening a Singapore Variable Capital Company (VCC)

Your Ultimate Guide to Opening a Singapore Variable Capital Company (VCC) | Bestar

Singapore VCC Fund Setup Guide

Your Ultimate Guide to Opening a Singapore Variable Capital Company (VCC)

Unlock Global Fund Management: How to Open a Singapore Variable Capital Company (VCC)

The Singapore Variable Capital Company (VCC) framework has solidified the nation's position as a premier global fund management hub. Introduced by the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA), the VCC is a versatile corporate structure designed specifically for investment funds. It offers unparalleled operational flexibility, cost efficiencies, and tax advantages, making it the go-to choice for fund managers worldwide.

This comprehensive guide breaks down everything you need to know about the VCC structure, its key benefits, and a step-by-step process for its incorporation in Singapore.

What is a Variable Capital Company (VCC)?

A VCC is a corporate entity used for collective investment schemes. Unlike traditional companies, a VCC's share capital is variable—it is always equal to its Net Asset Value (NAV). This unique feature allows for the issuance and redemption of shares without needing prior shareholder approval or a solvency test, which is a major draw for open-ended funds.

A VCC can be structured in two primary ways:

1. Standalone VCC: A single fund with one pool of assets and liabilities.

   
   

2. Umbrella VCC: A single legal entity with two or more segregated sub-funds. Each sub-fund holds a portfolio of ring-fenced assets and liabilities, meaning the failure of one sub-fund generally does not affect the others.

   
   

Top 5 Benefits of a Singapore VCC

Choosing to incorporate a VCC in Singapore offers significant advantages for fund managers and investors:

1. Unmatched Operational Flexibility

The variable capital structure is the VCC's defining feature.

• Easy Capital Changes: Shares can be issued and redeemed effortlessly at NAV, allowing for quick investor entry and exit.

  
  

• Dividend Payments: Dividends can be paid out of capital, providing greater flexibility compared to traditional corporate structures that can only pay dividends from profits.

  
  

• Fund Strategies: The VCC can be used for a wide range of investment strategies, including traditional and alternative funds (hedge funds, private equity, venture capital), and can be structured as both open-ended and closed-ended funds.

  
  

2. Cost and Administrative Efficiency (Umbrella Structure)

The Umbrella VCC structure delivers substantial economies of scale.

• Shared Services: Multiple sub-funds can share a single board of directors, a fund manager, auditors, and administrators, significantly reducing duplicated costs and administrative burdens.

  
  

• Single Tax Filing: An Umbrella VCC is treated as a single entity for tax purposes, simplifying compliance and reporting.

  
  

3. Enhanced Tax Benefits

Singapore offers attractive tax incentives for funds structured as VCCs.

• Fund Tax Incentive Schemes: VCCs are eligible for Singapore's key fund tax incentive schemes (Sections 13O and 13U of the Income Tax Act), which can exempt income derived from designated investments.

  
  

• Double Tax Treaties (DTAs): As a Singapore-domiciled company, a VCC can leverage Singapore's extensive network of over 80 DTAs to minimize withholding taxes on foreign-sourced income.

  
  

4. Investor Privacy

Unlike typical Singapore companies, the VCC’s register of shareholders is not required to be made public. This provides a higher level of privacy for the fund's investors, a crucial factor for many high-net-worth individuals and institutional investors.

5. Re-domiciliation Opportunities

Existing corporate fund structures established overseas can be re-domiciled and transferred to Singapore to become a VCC, streamlining the process of consolidating global fund operations in Singapore.

Step-by-Step Guide: How to Set up a VCC in Singapore

The VCC setup process is managed jointly by ACRA and MAS. Engaging a professional corporate service provider (CSP) or law firm is highly recommended to navigate the compliance requirements.

Phase 1: Preparation and Key Appointments

Step	Requirement	Details
1.	Appoint a Permissible Fund Manager	Every VCC must be managed by a Singapore-based fund manager that is licensed, registered, or exempted by MAS (e.g., a Capital Markets Services (CMS) license holder or a Registered Fund Management Company (RFMC)).
2.	Appoint Directors	At least one director must be ordinarily resident in Singapore. Additionally, at least one director must be a director or a qualified representative of the VCC’s fund manager. (For VCCs that are 'authorised schemes,' there are stricter requirements of a minimum of three directors, including one independent director).
3.	Appoint Key Officers	Appoint a Singapore-based Company Secretary (must be a natural person ordinarily resident in Singapore and not the sole director). Appoint an Auditor within three months of incorporation.
4.	Secure a Registered Office	A VCC must have a local registered office address in Singapore.
5.	Draft the Constitution	Prepare the VCC's constitution, which must comply with the VCC Act.

Phase 2: Incorporation with ACRA

Step	Action	Details
6.	Name Application	Apply to ACRA via the online VCC Portal for approval of the VCC's name ($15 fee). The name is reserved for 120 days upon approval.
7.	Incorporation Filing	Submit the application for incorporation of the new VCC to ACRA (Incorporation fee: $8,000). The submission requires all key officer and fund manager details.
8.	Sub-fund Registration (for Umbrella VCC)	If setting up an Umbrella VCC, you must register each sub-fund with ACRA concurrently with the incorporation.

Phase 3: Post-Incorporation Compliance

Step	Action	Details
9.	AML/CFT Compliance	The VCC must comply with MAS's Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) obligations. This includes appointing a suitable agent to perform customer due diligence (CDD) on investors.
10.	Bank Account & Administration	Open a custodian bank account and finalize all administrative setup, including fund accounting, NAV calculation, and investor reporting.
11.	Grant Application (Optional)	Consider applying for the VCC Grant Scheme (if available) from MAS, which can co-fund up to 70% of qualifying expenses for new VCCs (capped at S$150,000).

Why Choose Singapore for Your Fund Domiciliation?

Beyond the VCC itself, Singapore offers a stable and reputable jurisdiction for fund managers:

• Robust Regulation: A well-regulated and transparent financial environment under MAS.

  
  

• Skilled Workforce: Access to a deep pool of skilled fund administration, legal, and financial talent.

  
  

• Geographical Hub: Strategic location as a gateway to Asian markets.

Ready to Launch Your VCC?

The Singapore Variable Capital Company is more than just a legal entity—it's a strategic platform for global fund managers seeking efficiency, flexibility, and tax optimization. By understanding the VCC's unique requirements and benefits, you can successfully establish your fund and leverage Singapore's world-class financial infrastructure.

The VCC framework involves complex regulatory and tax requirements. You should always consult with a qualified Singapore-based corporate service provider, lawyer, or tax advisor before setting up a VCC.

Launch Your Global Fund: How Bestar Singapore Smooths Your VCC Setup Journey

Your Ultimate Guide to Opening a Singapore Variable Capital Company (VCC)

Navigating the VCC Landscape: Why Bestar Singapore is Your Ideal Partner

The Singapore Variable Capital Company (VCC) is a world-class fund structure, but its successful launch requires deep expertise in corporate compliance, financial regulation, and tax law. For international and local fund managers, partnering with an experienced service provider is non-negotiable.

Bestar Singapore, a full-service corporate and financial advisory firm, offers comprehensive, end-to-end solutions that de-risk and expedite your VCC setup and ongoing administration. We translate complex ACRA and MAS requirements into a seamless launch plan, allowing you to focus purely on your investment strategy.

Here is your ultimate guide to how Bestar Singapore supports your VCC journey.

Phase 1: VCC Incorporation and Setup (Compliance & Structuring)

The initial phase involves stringent adherence to the Variable Capital Companies Act and various regulatory requirements. Bestar provides the essential groundwork to ensure a compliant and robust legal structure from day one.

1. VCC Name Reservation & Statutory Filing

The VCC incorporation process with ACRA is unique and requires specific documentation.

• Service: Handle the entire online filing process with the Accounting and Corporate Regulatory Authority (ACRA), including name application and the formal incorporation of the VCC (and registration of all sub-funds for an Umbrella VCC).

  
  

• Bestar Advantage: Our experts ensure all required details, including the Permissible Fund Manager and director particulars, are correctly submitted to meet ACRA’s exacting standards, minimizing costly delays. We also assist with the mandatory Transfer of Registration for overseas funds re-domiciling to Singapore.

2. Resident Appointments & Registered Office

Every VCC requires a local presence, including mandatory officer appointments.

• Service: Provide a qualified Singapore Resident Company Secretary, which is mandatory under the VCC Act. We can also assist in securing a Resident Nominee Director if your team requires a local resident to fulfil this statutory requirement. We also provide the official Registered Office Address for your VCC.

  
  

• Bestar Advantage: Our Corporate Secretarial team ensures ongoing maintenance of statutory registers and timely filing of all resolutions, keeping your VCC in good standing with the authorities.

3. Constitution Drafting & Fund Structuring

The VCC Constitution is the blueprint for your fund's operations.

• Service: Review and prepare the VCC's Constitution, ensuring it is tailored to your specific fund strategy (e.g., open-ended hedge fund or closed-ended private equity fund) while strictly complying with the VCC Act.

  
  

• Bestar Advantage: We ensure key VCC features—like the ability to pay dividends out of capital and issue/redeem shares at NAV—are correctly enshrined in your legal documents.

Phase 2: Regulatory and Financial Compliance (Ongoing Operations)

A VCC's operational efficiency depends on continuous compliance with MAS regulations and sound financial management. Bestar offers comprehensive post-incorporation support.

4. Anti-Money Laundering (AML) & Countering the Financing of Terrorism (CFT)

MAS requires VCCs to have robust AML/CFT systems.

• Service: Assist in establishing and documenting the necessary AML/CFT policies and procedures as required by MAS. This includes guidance on Customer Due Diligence (CDD) and ongoing monitoring obligations.

  
  

• Bestar Advantage: We act as your compliance guide, ensuring your fund's framework meets Singapore's stringent regulatory standards, thus safeguarding your VCC’s reputation and license.

5. Accounting, Bookkeeping & Fund Administration

VCCs must maintain separate accounting records for each sub-fund.

• Service: Provide expert bookkeeping, accounting, and financial statement preparation in accordance with required accounting standards (e.g., IFRS, US GAAP, or Singapore FRS). For Umbrella VCCs, we manage the segregation and reporting for each sub-fund.

  
  

• Bestar Advantage: Our accounting specialists simplify the complex NAV calculation and reporting required for VCCs, ensuring accurate financial data for investors and regulators.

6. Tax Advisory and Compliance

Maximizing tax efficiency is a primary goal of a VCC.

• Service: Advise on the optimal tax structure for your VCC. We manage annual tax compliance and filing and assist in the application for critical MAS Fund Tax Incentive Schemes (such as 13O or 13U), which can exempt fund income.

  
  

• Bestar Advantage: We help your VCC fully leverage Singapore's extensive Double Tax Treaty network, reducing cross-border tax leakage and maximizing investor returns.

Bestar’s Strategic VCC Advantage

By engaging Bestar Singapore, you gain a unified, full-service partner that manages the entire VCC lifecycle, from initial concept to annual reporting.

VCC Challenge	Bestar Solution
Complex Incorporation	Seamless ACRA filing and mandatory officer appointments.
Sub-Fund Management	Expert accounting and administration for segregated assets.
Tax Optimisation	Strategic advisory on tax incentives (13O/13U) and DTA access.
Regulatory Risk	Robust AML/CFT framework and ongoing MAS compliance.

Ready to launch your fund with confidence?

Contact Bestar Singapore today for a confidential consultation and take the first step toward launching your strategically efficient Variable Capital Company.

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