The Variable Capital Company (VCC) is a new corporate structure for investment funds constituted under the Variable Capital Companies Act which took effect on 14 Jan 2020. The VCC will complement the existing suite of investment fund structures available in Singapore.
The VCC Act and subsidiary legislation is administered by ACRA. All VCCs must be managed by a Permissible Fund Manager.
Prior to the availability of VCC, the primary legal structure fund managers used for holding investments was that of a private limited company. So if a fund wanted to invest in a specific target (Investment opportunity) and wanted to keep the investment amount segregated, then the fund will incorporate a separate private limited company for it.
Similarly, for a specific customer (LP- Also referred to as Limited Partner), a fund may create a separate private limited company to hold the assets.
As a result of this a fund may end up having multiple private limited companies under its ownership to manage different investment mandates. However, this was not the optimal structure because:
Because of these reasons, a private limited company as an entity to manage fund business was not preferable.
VCC has been created as a special structure for investment funds only (It can not be used for any general business). The legal entity of VCC provides the missing features that a corporate structure was lacking. More specifically :
The first step is to choose a suitable name for your VCC. Once you have a suitable name, conduct a search on Bizfile+ Search Directory to find out whether the name is available. Avoid selecting names which are:
A director is the person in charge of managing the affairs of the VCC. He/she must take decisions objectively in the best interests of the VCC. Every VCC must have at least 1 director who is ordinarily resident in Singapore (e.g. Singapore citizens, Permanent residents or holders of EntrePass/ Employment Pass) with a local residential address. Every VCC must also have at least 1 director (who may be the same person that is ordinarily resident in Singapore) who is either a Qualified Representative (as defined under the VCC Act) or a director of its fund manager.
VCCs consisting of Authorised Schemes must have at least 3 directors including 1 independent director. Authorised Scheme refers to a collective investment scheme (CIS) as defined under section 2(1) of the Securities and Futures Act (SFA) that is constituted in Singapore and authorised by MAS under section 286(1) of the SFA.
Here are the basic requirements for a VCC director. He/she must be:
A VCC must appoint a secretary within 6 months from its date of incorporation. A company secretary must be:
The position of company secretary must not be left vacant for more than 6 months. The sole director of a VCC and the company secretary cannot be the same person.
Every VCC must appoint an auditor within 3 months of its incorporation/registration. The audit exemptions under s205B and 205C Companies Act are not applicable to VCCs.
A VCC must appoint a Permissible Fund Manager to manage its property or operate the CIS that comprises the VCC. A Permissible Fund Manager refers to:
You will need to provide the Permissible Fund Manager’s Unique Entity Number (UEN), full name, address of the fund manager’s principal place of business and country of incorporation when submitting the application to incorporate a VCC. In addition, you will also need to provide a declaration by the Permissible Fund Manager in the prescribed form that it has consented to act as the fund manager of the VCC and fulfils one of the above criteria for a Permissible Fund Manager, as stipulated in section 46(2) of the VCC Act.
You must provide a registered office address when you incorporate a VCC. A registered office address refers to the place where all communications and notices to the VCC are addressed to, and the place where the VCC’s register and records are kept.
A registered office must be operational and accessible to the public during normal office hours, but need not be where the VCC conducts its activities (e.g. the registered office address may be in Raffles Place but the trading room could be located in Tuas).
The Constitution is a legal document that:
The applicant must attach a copy of the Constitution during incorporation / registration. The constitution document lodged with the Registrar will not be available to members of public but must be disclosed to public authorities upon request for supervisory and law enforcement purposes.
A model constitution is provided by the ACRA.
What information is required to complete this transaction?
1. Proposed VCC name;
2. Type of VCC;
3. Details of proposed director and VCC officers (include address, ID number, ID type and Nationality); and
4. In-Principle Approval Obtained from Other Authorities (if any).
It may take between 14 to 60 days for the application for incorporation of VCC to be processed. This includes the time required for referral to another government agency for approval or review, if necessary.
Name of Transaction
Statutory Filing Fees
|Application for VCC Name||$15|
|Application for Incorporation of VCC||S$8,000|
|Application of Transfer of Registration||$9,000 + S$400 (Sub-Fund registration fee) x No. of sub-funds|
|Registration of Sub-Fund||$400|
From the above it should be clear to you that you may need help to register a VCC in Singapore. Often times you may require small adjustments to the Constitution or additional legal documents prepared. So engage services of Singapore Compliance.
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