VCC or Variable Capital Company

The Variable Capital Company (VCC) is a new corporate structure regulated under the Variable Capital Companies Act, suitable for all types of investment funds in Singapore. It took effect on 14 Jan 2020. The VCC will provide an additional option for investors seeking to invest in a fund.

VCC or Variable Capital Company

The Variable Capital Company (VCC) is a new corporate structure regulated under the Variable Capital Companies Act, suitable for all types of investment funds in Singapore. It took effect on 14 Jan 2020. The VCC will provide an additional option for investors seeking to invest in a fund.
Proper accounting and administration practices are crucial for the successful operation of these variable capital companies. In accordance with regulations, the management of all Variable Capital Companies must be carried out by a Permissible Fund Manager under the oversight of ACRA. Additionally, the Monetary Authority of Singapore (MAS) will monitor and enforce these companies’ anti-money laundering and counter the financing of terrorism obligations.

Variable Capital Company (VCC) Features

Variable Capital Companies (VCC) can be structured in several ways. A Variable Capital Company can adopt a standalone or umbrella fund structure comprising multiple sub-funds with segregated assets and liabilities. Standard service providers can save money when used across the umbrella and sub-funds. Proper accounting and administration procedures are crucial for efficiently managing such entities.

By transferring their registration to Singapore as Variable Capital Companies, fund managers can incorporate new Variable Capital Companies or re-domicile their existing overseas investment funds with comparable structures.

Variable Capital Company has a flexible capital structure allows it to issue and redeem shares as needed. It can pay dividends out of the capital to meet dividend payment obligations.

A Variable Capital Company must maintain a register of shareholders, which does not have to be made public. However, it must disclose the register upon request by public authorities for regulatory, supervisory and law enforcement purposes.

Both closed-end and open-ended fund strategies can make use of a VCC.

What are the Requirements of a VCC?

Incorporating & establishing a VCC:

Know about the Variable Capital Company

Tax Handling of the Variable Capital Company (VCC)

Stand Alone (Single fund) VCC
Umbrella (Multiple Sub-fund) VCC
Under the ETF Scheme, the fund must satisfy the following economic conditions, among others:
In the past, fund managers had to use at least three Singapore companies with a fund size of S$150 million and a business spend of S$600,000. However, now they can use an umbrella VCC with three sub-funds, which offers significant benefits to them.
Tax Matters
A VCC is considered a single entity for tax purposes, requiring only one set of income tax returns to be filed with IRAS (Inland Revenue Authority of Singapore).
Tax Exemptions
The Financial Sector Incentive – Fund Management scheme has extended the 10% concessionary tax rate to approved fund managers who manage incentivised VCCs.
Double taxation treaties
VCCs can obtain a certificate of residence from IRAS, which lists the VCC name and all sub-funds receiving income from the source jurisdiction.
Stamp Duty
Transactions between sub-funds of a single VCC are subject to stamp duty as if they were separate legal entities.
Goods and Services (GST)
The transfer of goods and services between sub-funds is treated as a transaction between separate entities, subject to GST.
Tax treatment of the VCC

The legislation allows corporate entities from other jurisdictions that have one or more Collective Investment Schemes (CIS) to move their registration to Singapore and become a Variable Capital Company (VCC) by applying to the ACRA. However, the legislation does not provide a similar provision for Singapore-domiciled funds to convert to a VCC. These Singapore-domiciled funds will need to rely on standard acquisition agreements to transfer their assets to a VCC.

Comparison of a Company & a VCC

Private Company Limited by Shares (Company) Variable Capital Company (VCC)
Management Board of directors Board of directors
At least one director is required, who may or may not be the shareholder. 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.If VCC has authorized scheme, then it must have three directors, including one independent.
A VCC must appoint a Permissible Fund Manager to manage its property or operate the CIS that comprises the VCC.
The manager is required to possess a capital markets services license for fund management.
Taxes Companies are required to pay income tax at a rate of 17% on their corporate earnings. A VCC is treated as a single entity company for tax filing purposes. Only one set of income tax returns needs to be filed with IRAS.
Singapore has a simplified tax system, and shareholders are not taxed on dividends that are paid out. The total chargeable or exempt income of an umbrella VCC is calculated by aggregating the income of each of its sub-funds as if they were individual VCCs.
VCCs are required to pay income tax at the current corporate tax rate, which is 17%.
Singapore has a single tier tax system, and dividends that are paid out to shareholders are not subject to taxation.
Liability of partners/share- holders The obligation of the company is the responsibility of the company alone. Shareholders’ liability for the liabilities of the VCC or its sub-funds is limited to any unpaid amount on their shares. The income of a sub-fund is determined as if it were a VCC and the tax rules are applied at the sub-fund level. Tax credits, if any, are also computed at the sub-fund level.
The liability of a shareholder to contribute is limited to the amount if any, unpaid on their shares. The obligation of the VCC is the responsibility of the VCC alone. There are no other parties involved in fulfilling this obligation. Similarly, an obligation of a sub-fund is solely the obligation of that sub-fund.
The company’s liabilities will be paid from its assets. The VCC’s liabilities will be paid from its property.
The sub-fund is responsible for its own liabilities, not the VCC or other sub-funds.
Legal Status A company is considered as a distinct legal entity from its owners and shareholders. A VCC refers to a distinct and independent legal entity.
It can possess assets and hold them under its own name. It has the ability to own and manage assets in its own name.
The rights and responsibilities are distinct from those of its shareholders and directors. The rights and obligations of a company are distinct from those of its shareholders and directors.
Under an umbrella VCC, a sub-fund is not considered a separate legal entity from the VCC. However, the VCC has the power to take legal action or be sued on behalf of a sub-fund. Each sub-fund is treated as if it were a legal person and its property is also treated as if it were owned by a separate legal entity.

Benefits of Variable Capital Company (VCC)


Both open-ended and closed-end funds can be impacted by VCC, which has no restrictions on investment. You can also redeem investor investments and pay dividends using capital without difficulty.

Tax Transparency

VCCs are among the various tax incentives Singapore funds can use.


It also ensures that investors are safeguarded against leaking VCC financial statements and investor/shareholder registers to the public.

How can IMC Group help you?

Our team specializes in corporate launches and can support you at every step to ensure a successful outcome for the Variable Capital Company (VCC). We help you in
Our IMC Group are ready to support your VCC incorporation, ongoing corporate secretarial and variable capital company accounting and administration. We assist you in creating a company with variable capital. Get in Touch Today!

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