The Variable Capital Company (VCC) framework was launched in Singapore on January 2020 by the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA) with the goal of enhancing Singapore’s value proposition as a leading fund management hub. With a VCC structure, funds can enjoy greater operational flexibility and cost savings, including tax benefits and access to Singapore’s business friendly double-tax treaty network. Fund managers can incorporate a new fund or re-domicile their overseas funds as VCCS with ACRA. To further encourage industry adoption of the VC framework, MAS also launched a VCC Grant Scheme to help defray incorporation and registration costs. The grant scheme is active up to January 2023.

In December 2020, the MAS announced that the VCC framework for “permissible fund managers” could be relaxed subject to certain conditions to allow greater participation of Single Family Offices (SFOs) to manage VCCs. Currently SFOs are not registered or licensed by the MAS while current permissible fund managers for a VCC is a firm with a capital markets services license for fund management, or an exempt financial institution or a registered fund management company. The proposal will likely involve adjustments in registration and approval conditions as well as
safeguards put in place to close any significant regulatory gaps while ensuring key concerns over KYC and AML are in place.

Why Alder to Support Your VCC in Singapore

Alder believes that the VCC structure is a positive development, not restricted to SFOs. Alder works in close partnership with registered fund management professionals and legal advisors to monitor the evolving regulatory landscape closely. The key consideration for our clients remain how best to manage and operate the VCC structure, including incorporation, registration and on-going compliance in the most cost-effective manner. Alder continues to be the trusted compliance partner in implementing VCC relevant KYC/AML controls, policies and procedures that keeps your business sustainable, compliant, secure yet effective and nimble. For more details of how Alder approaches VCC framework for your benefit, please contact us for a no-obligation discussion.