Variable Capital Co. (VCC)

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Variable Capital Company (VCC) In Singapore


The Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA) launched the Variable Capital Companies (VCC) framework with effect from 15-January-2020. The VCC is a new corporate structure that can be used for a wide range of investment funds and provides fund managers greater operational flexibility and cost savings [*1] . It will encourage more funds to be domiciled in Singapore and enhance our value as an international fund management centre.

Fund managers will be able to constitute investment funds as VCCs across both traditional and alternative strategies, and as open-ended or closed-end funds [*2] . Fund managers may also incorporate new VCCs or re-domicile their existing investment funds with comparable structures by transferring their registration to Singapore as VCCs.

[*1] Fund managers will have greater flexibility in share issuance/redemption and the payment of dividends. Managers will also be able to incorporate multiple funds in a single VCC and achieve cost efficiencies.

[*2] An open-ended fund allows investors to redeem investments at their discretion, while a closed-end fund does not permit investors to do so.


Variable Capital Companies (VCC) Act Passed into Law in Singapore

Singapore has been recognised as a leading Asian fund management hub, with assets under management (AUM) growing 15% pa over the past five years, reaching S$3.3 trillion at the end of 2017. Singapore’s position as a full-service international fund management hub has recently been fortified through the introduction of a new corporate structure to attract for investment funds.

The Variable Capital Company (VCC) complements current unit trusts and investment companies, which are the two commonly used investment fund structures in Singapore, while bringing it with greater operational flexibility, cost efficiencies and tax benefits.

Before the VCC, offshore investment funds, even if managed in Singapore, are domiciled in principal global fund jurisdictions, such as the Cayman Islands, Dublin and Luxembourg, where legal and business regulatory structures allow more flexibility in capital, shares and taxation. Therefore, the economic benefits from funds managed locally have not been fully accrued.

The introduction of the VCC framework by Singapore consolidates fund domiciliation and fund management locally, and service providers, such as Corporate Services Providers (CSP), lawyers, accountants, fund administrators and fund custodians, gain more business opportunities, which in turn create new employment opportunities in the industry, as Singapore-based VCCs are likely to employ Singapore-based qualified corporate Secretaries, engage Singapore-based lawyers, fund administrators to facilitate their operations and expansion.

With fewer cross border administrative and compliance hurdles, the new framework will certainly enhance the Singapore nation’s asset management industry, as investors discover attractive incentives to both incorporate and operate in Singapore.


Variable Capital Companies (VCC) Grant Scheme

The Variable Capital Company (VCC) is a new corporate structure tailored for investment funds. MAS launched a Variable Capital Companies Grant Scheme (VCCGS) under the Financial Sector Development Fund (FSDF) to co-fund qualifying expenses paid to Singapore-based service providers for work done in Singapore, in relation to the incorporation or registration of a VCC.

Extended Variable Capital Companies Grant Scheme

The Variable Capital Companies Grant Scheme (“VCCGS”), first introduced on 15 January 2020 for a period of three years till 15 January 2023, has catalysed the adoption of Variable Capital Companies (“VCCs”) in Singapore. With effect from 16 January 2023, the VCCGS has been extended for a validity period of two years from 16 January 2023 to 15 January 2025 (both dates inclusive) (hereinafter referred to as the “Extended VCCGS”).

Under the Extended VCCGS, the Financial Sector Development Fund (“FSDF”) will co-fund 30% of qualifying expenses paid to Singapore-based service providers for qualifying work performed in Singapore in relation to the incorporation or registration of a VCC, up to a maximum grant cap of S$30,000 per application.

Click here to learn more about VCCGS


Key Features and Benefits of a Variable Capital Company (VCC)

• A VCC has a separate legal personality from the directors.
• A VCC will have members (also commonly known as shareholders).
• A VCC will have a board of directors responsible for the governance of the VCC’s operations. This board of directors of a VCC is the equivalent of the board of directors in a company incorporated under the CA.
• A VCC must be managed by a Permissible Fund Manager (please refer to the section “Fund Manager” below), regulated by the Monetary Authority of Singapore (MAS).
• A VCC can be set up as a single standalone/non-umbrella fund, or as an umbrella fund with one or more sub-funds, each without legal personality and having segregated assets and liabilities from the other.
• A VCC will not be required to disclose its register of members to the public, but this register must be disclosed to public authorities upon request for supervisory and law enforcement purposes.
• A VCC will be required to engage an eligible financial institution regulated and supervised by MAS for AML/CFT purposes to conduct the necessary checks and perform the measures in order for the VCC to comply with the relevant parts of the VCC AML/CFT Notice.
• A VCC can issue and redeem shares without the need for member/ shareholder approval.
• A VCC can pay dividends out of capital, and not only out of profits.
• A VCC can use either Singapore or other recognised international accounting standards (namely, International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (US GAAP)) for the preparation of its financial statements.


Regulatory Authorities for VCC

  • Governed by the new Variable Capital Companies (VCC) Act w.e.f. 15-January-2020
  • Regulated by the Accounting and Corporate Regulatory Authority (ACRA) for establishment and administrative purposes
  • Regulated by the Monetary Authority of Singapore (MAS) for anti-fraud purposes
  • Regulated by the Securities and Futures Act for all investment fund activities


 Determining the VCC type

A VCC can be set up as as a non-umbrella VCC or an umbrella VCC with two or more sub-funds, each holding a portfolio of segregated assets and liabilities.


Appointing Directors, Company Secretary and Other Key Persons

The next step is to appoint the VCC officers. You will need to provide their personal identification details, contact information (e.g. telephone number and email address) and residential address when you submit the application.


Types of appointed officers for Variable Capital Company (VCC)

Appointment of Director for Variable Capital Company (VCC)

A director is the person in charge of managing the affairs of the VCC. He/she must take decisions objectively in the best interests of the VCC. Every VCC must have at least 1 director who is ordinarily resident in Singapore (e.g. Singapore citizens, Permanent residents or holders of EntrePass/ Employment Pass) with a local residential address. Every VCC must also have at least 1 director (who may be the same person that is ordinarily resident in Singapore) who is either a Qualified Representative (as defined under the VCC Act) or a director of its fund manager.

VCCs consisting of Authorised Schemes must have at least 3 directors including 1 independent director. Authorised Scheme refers to a collective investment scheme (CIS) as defined under section 2(1) of the Securities and Futures Act (SFA) that is constituted in Singapore and authorised by MAS under section 286(1) of the SFA.

Here are the basic requirements for a VCC director. He/she must be:

  • At least 18 years old;
  • Of full legal capacity;
  • A Singapore Citizen, Singapore Permanent Resident or EntrePass holder
  • A director may also be an Employment Pass (EP) holder. However, an EP holder wishing to become a director of a VCC must first get a Letter of Consent (LOC) from the Ministry of Manpower (MOM);
  • FIN holders are advised to seek consent from the relevant pass issuing authority (e.g. MOM/ ICA) before registering or taking on appointment (e.g. Director, Secretary); and
  • Cannot be disqualified from acting as a director of a VCC e.g. an undischarged bankrupt.


Appointment of Managing Director for Variable Capital Company (VCC)

A VCC can choose to appoint a Managing Director, who must also be a director of the VCC, to manage and oversee all or part of the business. It is not compulsory to appoint a Managing Director.


Appointment of Company Secretary for Variable Capital Company (VCC)

A VCC must appoint a secretary within 6 months from its date of incorporation. A company secretary must be:

  • A natural person; and
  • Ordinarily resident in Singapore.
  • The position of company secretary must not be left vacant for more than 6 months. The sole director of a VCC and the company secretary cannot be the same person.


Appointment of Auditor for Variable Capital Company (VCC)

Every VCC must appoint an auditor within 3 months of its incorporation/registration. The audit exemptions under s205B and 205C Companies Act are not applicable to VCCs.


Foreigners Who Wish to Incorporate a Variable Capital Company (VCC) in Singapore

Foreigners who want to incorporate a VCC in Singapore must do the following:

  • Engage the services of a registered filing agent (e.g. a law firm, accounting firm or corporate secretarial firm) to submit the application on their behalf; and
  • Employ a director who meets the requirements described in the above section on Directors.

You may choose to reside outside of Singapore after setting up your VCC. However, if you wish to be present in Singapore to manage the VCC’s operations, you must seek approval from the Ministry of Manpower (MOM).


Appointment of Fund Manager for Variable Capital Company (VCC)

A VCC must appoint a Permissible Fund Manager to manage its property or operate the CIS that comprises the VCC. A Permissible Fund Manager refers to:

  • A licensed fund management company which holds a capital markets services licence for fund management under the Securities and Futures Act (SFA);
  • A registered fund management company which is registered under paragraph 5(1)(i) of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations;
  • A financial institution exempted under sections 99(1)(a), (b), (c) or (d) of the SFA from the requirement to hold a capital markets services licence to carry on business in fund management, i.e. a bank licensed under the Banking Act 1970, a merchant bank approved under the MAS Act 1970, a finance company licensed under the Finance Companies Act 1967 or a company or co-operative society licensed under the Insurance Act 1966.

You will need to provide the Permissible Fund Manager’s Unique Entity Number (UEN), full name, address of the fund manager’s principal place of business and country of incorporation when submitting the application to incorporate a VCC. In addition, you will also need to provide a declaration by the Permissible Fund Manager in the prescribed form that it has consented to act as the fund manager of the VCC and fulfils one of the above criteria for a Permissible Fund Manager, as stipulated in section 46(2) of the VCC Act.


Deciding on a Financial Year End

You must also decide on the first financial year end (FYE) of your new VCC. The FYE will determine when your corporate filings and taxes will be due. Common FYEs can include 31 March, 30 June, 30 September or 31 December. You must also decide whether your accounting period covers 12 months or over 52 weeks.

Registered Office Address

You must provide a registered office address when you incorporate a VCC. A registered office address refers to the place where all communications and notices to the VCC are addressed to, and the place where the VCC’s registers and records are kept.

A registered office must be operational and accessible to the public during normal office hours, but need not be where the VCC conducts its activities (e.g. the registered office address may be in Peninsula Plaza but the trading room could be located in Raffles Place).


Incorporation and Operational Requirements

  • VCC share capital will always be equal to the net asset value
  • To appoint at least one Singapore resident director (for non-authorised schemes); at least three directors (for authorised schemes)
  • To appoint a Singapore-based, MAS-licensed fund management company (FMC), unless exempted
  • To appoint Licensed Fund Manager regulated by MAS
  • To establish a registered office in Singapore
  • To appoint a Singapore-based company secretary
  • To be audited by a Singapore-based auditor
  • To submit financial statements as per IFRS, Singapore FRS or US GAAP



The constitution is a legal document that:

  • Describes the key characteristics of the VCC;
  • Contains the rules and regulations for its governance;
  • Describes how its operations will be carried out; and
  • States the rights and responsibilities of the directors, shareholders and company secretary.

The applicant must attach a copy of the constitution during incorporation / registration. The constitution document lodged with the Registrar will not be available to members of public but must be disclosed to public authorities upon request for supervisory and law enforcement purposes.


Model Constitutions For VCC

The model constitutions are useful templates for early adopters of the VCC as a reference and are customisable as required.

Note: The model constitutions are not drafted nor endorsed by MAS or ACRA.

Source for Model Constitutions For VCC: Singapore Academy of Law (“SAL”)

Guidance notes for model Constitutions for VCC

Guidance notes give pointers as to how the model constitutions can be structured. Learn from Guide with the source from Singapore Academy of Law (“SAL”).


Constitution Draft From ACHI

Due to the new structure of the company in Singapore, the drafting of the Constitution for Variable Capital Company requires specialist knowledge of Tax Laws, Security and Futures Regulations, etc.

We are arranging for having the Constitution for VCC at the reasonable cost on reimbursement basis through our Associate legal Firm.



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Statutory Fees For VCC

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Source of Information, Guidelines, Compliance, Laws, Rules & Regulations is from the relevant authorities of Singapore
Details of Source Name of Authorities
  • Corporate matters such as Companies, Businesses, VCC Model Constitutions, etc
  • The Accounting and Corporate Regulatory Authority (ACRA)
  • The Monetary Authority of Singapore (MAS)
  • Singapore Academy of Law (SAL)
  • CPF matters
  • CPF Board
  • Fair Employment Practices (FEP)
  • Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP)
  • Immigration matters & Student Passes
  • Immigration Checkpoints Authority (ICA)
  • Taxation and GST
  • The Inland Revenue Authority of Singapore (IRAS)
  • Skills Development Levy (SDL)
  • SkillsFuture Singapore Agency
  • Work Passes
  • The Ministry Of Manpower (MOM)
Please refer to SERVICES if you wish to proceed or CONTACT us for more information.