Singapore has launched the Variable Capital Company framework with effect from 15 January 2020 in a bid to attract more investment funds and foreign private capital to Singapore and encourage more fund managers to domicile their funds in Singapore. This new structure would add to Singapore's full service offerings for any type of fund to be based in this jurisdiction. The Variable Capital Company (VCC) would be regulated by the Variable Capital Companies Act 2018 (VCC Act). The new structure is tailored for collective schemes and would be open to both open-end and closed-end funds, traditional and alternative funds – be it private equity, venture capital, hedge fund or any other fund with different strategies. The VCC can be a stand-alone entity or an umbrella entity with multiple sub-funds.

This article sets out the key aspects of the VCC so that readers can be informed of the principal features through an easy glance:


Features Variable Capital Company
Legal Form

Body corporate incorporated under the VCC Act for investment funds and having a separate legal personality.

It can be set up as a stand-alone entity or an umbrella entity with multiple sub-funds. VCC will be a single legal entity, with its sub-funds operating as separate cells (each without legal personality).

Legislative Framework

Variable Capital Companies Act 2018 for the incorporation, operation and regulation of the structure.

Statutory Filing Fees

VCC name reservation – S$15

Application for incorporation of VCC – S$8,000

Registration of Sub-Fund – S$400

Application for transfer of registration – S$9,000 + S$400 (sub-fund registration fee) x number of sub-funds.

Processing time for application

It will usually take up to 14 days to process an application form (except for Transfer of Registration which may take up to 60 days) from the date of submission of all required documentation. If referral to another government agency is required, it may take up to 60 days processing time.

Administering authority

Accounting and Corporate Regulatory Authority (ACRA) will administer the VCC Act.

(For matters relating to anti-money laundering and countering the financing of terrorism, the administering authority would be MAS.)

Owned by

Subscribers to the constitution of the VCC and every other person who agrees to become a member of the VCC and whose name is entered in the register of members.

Legal status

A separate legal entity from its members and directors, entity can sue or be sued in own name and also own property in own name.

  • For VCC, a sub-fund of an umbrella VCC is not a legal person separate from the VCC, but the VCC may sue or be sued in respect of a sub-fund.
  • The property of a sub-fund is subject to orders of a court as it would have been if the sub-fund were a separate legal person.

Members have limited liability.

  • For VCC, the liability of a member of the VCC is limited to the amount, (if any) unpaid on the shares held by the member.
  • Members not personally liable for debts and losses of the VCC
Yearly statutory obligations

Annual returns must be filed after its AGM and within 7 months after the end of its financial year.

Accounting and governance

Wider scope of accounting standards to be used in preparing a VCC's financial statements thus allowing more flexibility in financial reporting:

  • Apart from Singapore accounting standards and recommended accounting principles, the use of International Financial Reporting Standards and US Generally Accepted Accounting Principles would also be permitted.
  • Subject to audit by a Singapore based auditor
  • Accounting standards should be consistently applied across all the sub-funds
  • Umbrella VCC must also keep separate accounting and other records for each sub-fund that sufficiently explains the transactions and financial position of each sub-fund and devise and maintain a system of internal accounting controls sufficient to provide a reasonable assurance that assets of each sub-fund are safeguarded against loss from unauthorised use and that transactions of each sub-fund are properly authorised.

Foreign corporate fund structures similar to VCCs can re-domicile or transfer their registration to Singapore.

  • This will encourage fund managers with funds domiciled in offshore jurisdictions such as Cayman Islands, to shift fund domiciliation with their fund management activities to Singapore.
Appointment of company secretary and auditors

Company secretary: Must appoint at least 1 company secretary within 6 months of incorporation.

Auditor: Must appoint an auditor within 3 months after incorporation, unless the company is exempt from audit requirements.

Requirement for fund manager

VCC must appoint a fund manager that is regulated by MAS to manage its investments.

  • This will facilitate supervisory oversight on the use of the VCC, including to prevent a VCC from being abused for unlawful purposes and to help ensure that it is not used as an offshore vehicle without actual investment management activities in Singapore.
  • The fund manager must be
    • A holder of a capital markets services licence for fund management under the SFA;
    • A Registered Fund Management Company;
    • A bank licensed under the Banking Act in respect of any regulated activity;
    • A merchant bank approved as a financial institution under the MAS Act in respect of any regulated activity which it is approved to carry out under that Act;
    • A finance company licensed under the Finance Companies Act in respect of any regulated activity that is not prohibited by that Act;
    • Any company or co-operative society licensed under the Insurance Act in respect of fund management for the purpose of carrying out insurance business; or
    • Any prescribed persons; and
    • A VCC cannot be its own manager
Number of shareholders and directors

Shareholders: At least one shareholder/ subscriber/ member. Subscribers can be either local individual, local corporate entity, or foreign individual/corporate entity (the latter would be required to engage a Corporate Service Provider to assist with filings).


  • Must have (a) at least one director who is ordinarily resident in Singapore; and (b) at least one director (who may be the same as (a)) who is either a Qualified Representative (as defined under the Variable Capital Companies Act) or a director of the VCC's fund manager.
  • Director of a VCC must also be a "fit and proper person".
Registration requirements

The registering party must submit to ACRA:

  1. the constitution of the proposed VCC and other prescribed documents;
  2. the name of the manager of the proposed VCC;
  3. the names of the director(s) of the proposed VCC;
  4. provide ACRA the last day of the first financial year of the proposed VCC and such other information as may be prescribed; and
  5. pay ACRA the prescribed fee.
Requirement for Annual General Meeting (AGM)

An AGM must be held at the end of a financial year within 6 months.

However, a VCC need not hold an AGM if:

  1. its directors give at least 60 days' written notice to the members before the last date on which the AGM must be held; or
  2. the VCC has sent to all persons entitled to receive notice of general meetings a copy of the financial statements, or copies of the consolidated financial statements and balance sheet, relating to the relevant financial year, and accompanied by the auditor's report on them, no later than 5 months after the end of the financial year.

However, one or more members with 10% or more of the total voting rights may by notice to the VCC require the AGM to be held.

  • Tax treatment remains the same as a Singapore company – the VCC is to be treated as a single entity for tax purposes and also eligible to apply for tax exemption
  • Enhanced Tier Fund (ETF) Scheme and Singapore Resident Fund (SRF) Scheme under the Income Tax Act will apply to a stand-alone VCC similar to how it would apply to a Singapore company.
Continuity in law

A VCC has perpetual succession until it is wound up.

Closing the business

Winding up- voluntarily by members or creditors, or compulsorily by the High Court. When winding up a sub-fund, all shareholders of a sub-fund should redeem their shares (where appropriate) and the VCC shall be required to submit an application to the MAS to be de-authorised.

VCC Grant Scheme

To further encourage industry adoption of the VCC framework in Singapore, MAS has also launched a Variable Capital Companies Grant Scheme. The grant scheme will help defray costs involved in incorporating or registering a VCC by co-funding up to 70% of eligible expenses paid to Singapore-based service providers. The grant is capped at S$150,000 for each application, with a maximum of three VCCs per fund manager.

The grant scheme will be funded by the Financial Sector Development Fund (FSDF) administered by MAS and take effect today for a period of up to three years.

Applications for the grant are to be made directly by the fund manager to MAS.

This author views the following points as worth noting by any party looking to set up a VCC:

  1. The VCC would be regulated by both ACRA and MAS;
  2. A VCC must have "VCC" as part of and at the end of its name;
  3. There would be a requirement for a Singapore-based licensed or regulated fund manager for a VCC (unless exempted under regulations);
  4. Directors of a VCC can dispense with need to hold an annual general meeting (AGM) with at least 60 days' written notice to the members prior to the last date to hold AGM (thus lowering operating costs). In contrast, for companies, all members must pass a resolution at a general meeting to dispense with the need to hold an AGM;
  5. Another key difference between a VCC and a company from an administrative standpoint is that there is no need for shareholders' approval for a VCC to redeem shares thereby providing flexibility in the distribution and return of capital as well as payment of dividends out of capital. In contrast, companies under Companies Act are subject to restrictions on capital reduction and can only pay dividends out of profits;
  6. Financial statements are not required to be made public; and
  7. Unlike companies, VCCs' shareholder registers are not required to be made public (but open to inspection by a public authority) – thus offering privacy to investors.


The VCC is intended to complement the existing structures available for use by fund managers in Singapore (namely unit trusts, companies incorporated under the CA and limited partnerships governed under the Limited Partnerships Act). It is hoped that this new corporate structure with corresponding tax benefits and the attractiveness of doing business in Singapore would spur more funds (with varying strategies) to be domiciled in Singapore and enable Singapore to continue its growth as a full-service international fund management hub.

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.