Entities | Variable Capital Company | Company |
| Legal Form | - Body corporate incorporated under the VCC Act for investment funds and having a separate legal personality.
- It can be set up as a stand-alone entity or an umbrella entity with multiple sub-funds. VCC will be a single legal entity, with its sub-funds operating as separate cells (each without legal personality)
| A business form which is a legal entity separate and distinct from its shareholders and directors |
| Legislative Framework | - Variable Capital Companies Act 2018 for the incorporation, operation and regulation of the structure (with certain provisions ‘borrowed’ from the Companies Act i.e. registration of charges etc)
- The Securities and Futures Act will govern the offering of shares in a VCC and all other aspects concerning the VCC as a fund.
| Companies Act, Chapter 50 |
| Administering authority | - Accounting and Corporate Regulatory Authority (ACRA) will administer the VCC Act.
- The Monetary Authority of Singapore (MAS) will oversee its anti-money laundering and countering the financing of terrorism obligations.
| Accounting and Corporate Regulatory Authority (ACRA) |
| Owned By | The subscribers to the constitution of the VCC and every other person who agrees to become a member of the VCC and whose name is entered in the register of members. | - Exempt Private Company – 20 members or less and no corporation holds beneficial interest in the company’s shares
- Private Company – 50 members or less
- Public Company – more than 50 members
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| Legal Status | For VCC, a sub-fund of an umbrella VCC is not a legal person separate from the VCC, but the VCC may sue or be sued in respect of a sub-fund. The property of a sub-fund is subject to orders of a court as it would have been if the sub-fund were a separate legal person. | It is a separate legal entity from its members and directors, entity can sue or be sued in own name and also own property in own name. |
| Liability | - The liability of a member of the VCC is limited to the amount, (if any) unpaid on the shares held by the member.
- Members are not personally liable for debts and losses of Company
| Members of the Companies have limited liability. |
| Yearly statutory obligations | Annual returns must be filed after its AGM and within 7 months after the end of its financial year | Annual returns must be filed after its AGM (a) in the case of a listed company, within 5 months after the end of its financial year; and (b) in any other case, within 7 months after the end of its financial year |
| Accounting and governance | The wider scope of accounting standards to be used in preparing a VCC’s financial statements thus allowing more flexibility in financial reporting: - Apart from Singapore accounting standards and recommended accounting principles, the use of International Financial Reporting Standards and US Generally Accepted Accounting Principles would also be permitted.
- Audit by a Singapore based auditor
- Accounting standards should be consistently applied across all the sub-funds
- Umbrella VCC must also keep separate accounting and other records for each sub-fund that sufficiently explains the transactions and financial position of each sub-fund.
| Singapore accounting standards and recommended accounting principles for companies which are consistent with Singapore Financial Reporting Standards |
| Re-domiciliation | - Foreign corporate fund structures can re-domicile as VCCs in Singapore.
- This will encourage fund managers with funds domiciled in offshore jurisdictions such as Cayman Islands, to shift fund domiciliation with their fund management activities to Singapore.
| Foreign corporate entity can re-domicile to Singapore and become a Singapore entity (provided the host country recognises or authorises re-domiciliation) |
| Appointment of company secretary and auditors | Company Secretary: Must appoint at least 1 company secretary within 6 months of incorporation.
Auditor: Must appoint an auditor within 3 months after incorporation, unless the company is exempt from audit requirements |
| Requirement for fund manager | - VCC must appoint a fund manager that is regulated by MAS to manage its investments.
- This will enable supervisory oversight on the use of the VCC, including to prevent a VCC from being abused for unlawful purposes and to help ensure that it is not used as an offshore vehicle without actual investment management activities in Singapore
| No such requirement for fund manager. |
| Number of Shareholders | At least one shareholder. (Note: s16 and s17 VCC Act states that any person may incorporate a VCC and the subscribers to the constitution of a VCC are considered to have agreed to become members of the VCC) | At least one shareholder |
| Number of Directors | - At least one director of the VCC must be a Director of the Fund Manager or must be at least a Qualified Representative.
- Directors of a VCC must also be “fit and proper persons”.
- At least one Singapore resident director for non-authorised schemes and at least 3 directors for authorised schemes.
| Must have at least one director who is ordinarily resident in Singapore |
| Registration requirements | The registering party must submit to ACRA: - the constitution of the proposed VCC and other prescribed documents;
- the name of the manager of the proposed VCC;
- the names of the director(s) of the proposed VCC;
- provide ACRA the last day of the first financial year of the proposed VCC and such other information as may be prescribed; and
- pay ACRA the prescribed fee.
- Declaration by either a registered qualified individual or a director or secretary of the proposed that all requirements for formation of company have been complied with and identities of subscribers and officers of the VCC have been verified.
| The registering party shall submit to ACRA: - the constitution of the proposed company (unless the company use model constitution) and such other documents as may be prescribed;
- furnish ACRA with the last day of the proposed company’s first financial year and such other information as may be prescribed; and
- pay ACRA the prescribed fee.
- Declaration by either a registered qualified individual engaged in the formation of the proposed company or a director or secretary of the proposed that all requirements for formation of company have been complied with and identities of subscribers and officers of the proposed company have been verified.
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| Taxes | - VCC will be treated as company and a single tax entity under ITA, subject to such modification and rules made under the ITA.
- Tax exemption schemes under s13R and s13x (i.e the Resident Fund Scheme and Enhanced Fund Scheme respectively, which are two main tax exemption schemes for fund management available for Singapore based funds.
- The tax residency will be determined at umbrella level for an umbrella VCC
| - Profit taxed at Corporate Tax Rates
- New company can avail Start-up tax exemption subject to fulfilment of exemption conditions
- Other companies are applicable for partial tax exemption
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| Continuity in law | A VCC has perpetual succession until it is wound up | A company has perpetual succession until it is wound up or struck off |
| Closing the business | - Winding up- voluntarily by members or creditors, or compulsorily by the High Court. When winding up a sub-fund, all shareholders of a sub-fund should redeem their shares (where appropriate) and the VCC shall be required to apply to the MAS to be de-authorised.
- No striking off for VCC unlike for companies under the CA
| - Winding up-voluntarily by members or creditors or compulsorily by High Court.
- Striking off
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