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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.
Know about the Variable Capital Company
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.
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.
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.
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