Launch of the VCC

On January 15, 2020, Singapore launched the framework for the Variable Capital Company (VCC), its initiative to strengthen the city-state’s position as an investment fund centre. With the VCC framework put in place and fully effective, Singapore-based fund managers have an additional local fund structuring option.

The VCC provides great flexibility in structuring a fund, as it can be set up as a stand-alone or an umbrella fund. Next to that, the VCC can be used for both open-end and closed-end funds with varying investment strategies (also within the same umbrella fund). It is expected that the VCC will encourage Singapore-based fund managers regulated by the MAS to domicile their fund in Singapore as well, thus offering a solution to have both fund manager and fund in one reliable jurisdiction.

In order to enhance the adoption of the VCC framework by the industry, the MAS has launched the Variable Capital Companies Grant Scheme. With the grant scheme, applicable fund managers are able to lower the costs of setting up a VCC fund structure. Up to 70% of eligible expenses might be reclaimed from MAS under the grant scheme, with a cap of SGD 150,000. Also, the grant scheme may be used for up to three VCCs and it will stay in effect for three years.

If you want to know more about the VCC or are interested in how Circle Partners can assist you with setting up your VCC, please see our Singapore insight here or contact Gerben Oldekamp or Bastiaan Koelewijn.