Singapore Variable Capital Company (VCC) Structure 

Key Features

The Variable Capital Company (VCC) is a new corporate entity structure under which several collective investment schemes (whether open or close end) may be gathered under the umbrella of a single corporate entity and yet remain ring-fenced from each other. 

The VCC is similar to segregated portfolio company (SPC) structures in the Cayman Islands. 

Singapore VCC is governed by the Variable Capital Company Act which was passed on 1st Oct 2018 and came into force on 14th January 2020. 

The umbrella structure creates economies of scale as sub funds can share common service providers and consolidate some administrative functions. 

For umbrella VCC’s the Section 13R and 13X tax incentives are granted at the umbrella level. This may make it easier for the tax incentive conditions to be met. For example the business spending condition of S$200k will be imposed at the VCC level and not the sub-fund level.

Apart from the Singapore Financial Reporting Standards (SFRS), a VCC is permitted to prepare its financial statements using international accounting standards such as the International Financial Reporting Standards and US GAAP. This allows for greater flexibility to serve the needs of global investors. 

Foreign corporate funds (for example a Cayman SPC or a BVI) may redomicile to a VCC subject to certain conditions. 

The Firm currently utilises the VCC structure and is able to assist with the establishment of a standalone VCC or sub-fund under an existing VCC.