VCC Fund Structure – Key Features and Legal Considerations
Learn about the VCC fund structure in Singapore, its legal framework, and how it facilitates flexibility for fund managers and investors.
VCC Fund Structure: Key Features in Singapore
The Variable Capital Company (VCC) is a corporate structure tailored for investment funds, offering unmatched flexibility in capital management.
Designed for both open-ended and closed-ended funds, the VCC supports a wide range of investment strategies while ensuring compliance with Singapore’s financial regulations.
What Makes the VCC Fund Structure Unique?
The VCC structure stands out due to its operational versatility and investor-friendly features:
Multiple Sub-Funds
Operate several investment strategies under a single umbrella while maintaining segregated assets and liabilities for each sub-fund.
Flexible Share Issuance
Issue and redeem shares at varying values to meet dividend obligations seamlessly.
Cost-Effective
Share common service providers across sub-funds, reducing administrative costs.
Investment Flexibility
Accommodates diverse asset classes, including private equity, public markets, and real estate.
Legal Considerations for VCC Fund Structures
Compliance with the VCC Act is vital for smooth operations. Key players within the VCC structure include:
VCC Directors
Responsible for fund establishment and strategy, supported by a Singapore-licensed fund manager for regulatory compliance.
Fund Manager
Ensures adherence to MAS regulations while coordinating with stakeholders and service providers.
Service Providers
Deliver accounting, auditing, legal, and operational support for efficient fund administration.
Additionally, the VCC requires a shareholder register to be maintained, which remains private but accessible to public authorities for regulatory purposes.
Benefits of the VCC Structure
The VCC framework is ideal for fund managers seeking scalability, flexibility, and tax efficiencies:
Scalability
Unlimited sub-funds to support growth and expansion.
Umbrella Structure Efficiencies
Streamlined administration for multiple funds under one entity.
Tax Exemptions
Evaluated at the umbrella level, with shared compliance across sub-funds.
Pathway to Residency
Provides foreign business owners a potential route to long-term residency in Singapore.