17 October 2018

The Singapore Variable Capital Company

On 1 October 2018, the Variable Capital Companies Bill was moved for its second reading in the Singapore Parliament and was passed into law. The long awaited implementation of the Singapore Variable Capital Company (also known as the “VCC”) is now almost complete. The introduction of the VCC is intended to further enhance Singapore’s appeal as an international fund management hub. It expands Singapore’s existing toolbox of domestic vehicles and brings it into closer alignment with competitor jurisdictions such as Hong Kong, Luxembourg, Ireland and traditional offshore jurisdictions.

Singapore continues to gain prominence as global funds centre. According to a survey conducted by the Monetary Authority of Singapore (“MAS”) in 2016 , Singapore had reached S$2.7 trillion of assets under management (“AUM”). This amount grew to S$3.3 trillion by the end of 2017. Approximately 70% of the AUM is invested into the Asia-Pacific Region which demonstrates the position of Singapore as a hub for the deployment of regional capital. It is anticipated that the introduction of the VCC will help these positive growth trends to continue.

In this article, we discuss the features of the VCC, along with the legal and tax considerations for using this new instrument. For the full article, please click here.

UPDATE: Following the publication of this article, the Monetary Authority of Singapore has announced the tax framework for VCCs. To read more, please click here.

Category: Article