Variable Capital Company (VCC)

The VCC was created by the Variable Capital Companies Act 2018 and is administered by the Accounting and Corporate Regulatory Authority (ACRA), with AML/CFT and fund-manager supervision by the Monetary Authority of Singapore (MAS). Its capital varies with subscriptions and redemptions, so shares can be issued and redeemed without the capital-maintenance restrictions of an ordinary company, and distributions can be paid out of capital.

A VCC can be used for open- or closed-ended strategies, including hedge, private equity, private credit and real estate funds. An umbrella VCC can hold multiple sub-funds with legally segregated assets and liabilities while sharing a board and service providers. The VCC must be managed by a MAS-licensed or registered fund manager (or a permitted exempt manager), have at least one director who is also a director of that manager, and at least one director ordinarily resident in Singapore. Its register of shareholders is not public. Financial statements are audited annually and may be prepared under Singapore FRS, IFRS or US GAAP.

Operationally, each sub-fund needs its own books, NAV and bank accounts, and costs must be allocated between sub-funds under a documented method. Tax incentive schemes may apply subject to conditions. Requirements continue to evolve; check current requirements with Singapore counsel.