VCC Solutions

The Variable Capital Company (VCC) is a new corporate structure for investment funds constituted under the Variable Capital Companies Act. The VCC allows for several collective investment schemes to be gathered under the umbrella of a single corporate entity with segregated assets and liabilities.  It is a flexible structure that can accommodate the creation of sub-funds with either open or close-ended strategies. The VCC will complement the existing structures available in Singapore for investment funds which are companies, unit trusts and limited partnerships.

1. A Highly Competitive Economy
   Singapore is a global financial centre with political stability and a pro-business environment with excellent infrastructure, international connectivity and a highly-skilled labour force.
2. Flexibility 
   A VCC may freely redeem its shares (without the requirement for solvency tests and corporate resolutions) and pay dividends using its net assets/capital, thereby providing flexibility in the distribution and return of capital. 
3. Confidentiality
   Subject to adhering to certain regulatory requirements, the register of members of a VCC is not required to be open for inspection by the public. Financial statements are also not publicly available.
   
4. Reduced Tax Compliance Burden
   An umbrella VCC will only need to file a single corporate income tax return regardless of the number of sub funds the umbrella VCC has.
5. Easier to Meet the Needs of Different Investors
   Apart from the Singapore Financial Reporting Standards, a VCC is permitted to prepare its financial statements using international accounting standards such as the International Financial Reporting Standards and the US Generally Accepted Accounting Principles.  This allows for greater flexibility to serve the needs of global investors.
6. Cost Efficiencies 
   The umbrella structure creates economies of scale as sub-funds can share the same board of directors and common service providers and consolidate some administrative functions.
   
7. Easier to Meet the Conditions for Tax Exemption under Section 13R and 13X of the Income Tax Act
   The tax incentive conditions and the economic commitments under both incentive schemes will be applied to the umbrella VCC rather than to the individual sub-funds.
   
8. Different Strategies under One Roof
   Fund managers are able to adopt open-ended and closed-ended investment strategies for different sub-funds within a single VCC entity.