Variable Capital Company Act: Key Requirements

The Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA) have launched the Variable Capital Companies (VCC) framework in Singapore. The Variable Capital Company Act is a new corporate structure that can be used for a wide range of investment funds and provides fund managers greater operational flexibility and cost savings. The aim is to encourage more funds to be domiciled in Singapore and enhance Singapore’s value as an international fund management centre.

Under the Variable Capital Company Singapore Act, fund managers will be able to constitute investment funds as VCCs across both traditional and alternative strategies, and as open-ended or closed-end funds. Fund managers may also incorporate new VCCs or re-domicile their existing investment funds with comparable structures by transferring their registration to Singapore as VCCs.

VCC provides an alternative to Singapore’s existing structures, namely, unit trusts, limited partnerships, limited liability partnerships and companies. VCC is regulated under the Variable Capital Company Act 2018 and The Accounting and Corporate Regulatory Authority (ACRA) is the administrating authority for the VCC Act except in relation to anti-money laundering/countering the financing of terrorism (AML/CFT) which is supervised by the Monetary Authority of Singapore (MAS).