VCC STRUCTURE
Variable Capital Company: Understanding This Corporate Structure
A Variable Capital Company (VCC) is a corporate structure designed for investment funds, allowing for flexible capital management. Unlike traditional companies, a VCC can issue and redeem shares at varying values, facilitating easy adjustments to its capital base.
The VCC structure is particularly advantageous for fund managers as it provides a streamlined approach to capital management, regulatory compliance, and investor liquidity. The VCC framework supports both open-ended and closed-ended funds, making it a versatile choice for a range of investment strategies.
Understanding The Key Players In A VCC Structure
In a VCC structure, VCC directors are responsible for establishing the fund, developing its investment strategy, and conducting outreach and fundraising efforts for investors. They do not need to be based in Singapore, provided the fund has a licensed fund manager located in Singapore.
Key Features Of The VCC Structure
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A VCC features a flexible capital structure, allowing for the issuance and redemption of shares, and enabling dividend payments from capital, providing fund managers with the flexibility to meet dividend obligations.
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A VCC can be established as a single standalone fund or an umbrella fund with multiple sub-funds, each possessing its own segregated assets and liabilities. For fund managers using an umbrella VCC structure, cost efficiencies can be achieved by utilising common service providers across the umbrella and its sub-funds.
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A VCC is suitable for both open-ended and closed-end fund strategies.
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Fund managers can either incorporate new VCCs or re-domicile their existing overseas investment funds with similar structures by transferring their registration to Singapore as VCCs.
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VCCs are required to maintain a register of shareholders, which does not need to be publicly accessible. However, this register must be made available to public authorities upon request for regulatory, supervisory, and law enforcement purposes.
Benefits Of The VCC Structure
The VCC structure is built for scalability and flexibility, enabling the creation of unlimited sub-funds to support growth and expansion.
Seamless Scalability
Unrestricted Investment Flexibility
Efficient Umbrella Structure
Pathway To Long-Term Residency
The VCC structure is built for scalability and flexibility, enabling the creation of unlimited sub-funds to support growth and expansion.
The VCC structure allows for the investment of a diverse range of assets, spanning private, public, and real estate sectors.
The VCC tax exemption is evaluated at the umbrella level, enabling each sub-fund to collectively meet the criteria.
The VCC structure enables robust asset protection within Singapore’s well-regulated and efficient environment while offering foreign business owners a pathway to long-term residency.
