A Variable Capital Company is a new corporate entity type introduced in Singapore as part of the VIEs Framework. It is designed for open-ended funds and will offer greater flexibility for fund managers to deploy capital and respond to market changes. The VCC structure also provides enhanced investor protection by segregating assets and liabilities between different compartments. If you are looking for a flexible and responsive way to manage your investments, a VCC could be the right solution for you. This blog post will explore a VCC and how it can benefit you.
A Variable Capital Company (VCC) could be the right solution if you want to invest more flexibly and responsively. VCCs are a new corporate entity type introduced in Singapore as part of the VIEs Framework, designed for open-ended funds. This blog post will explore a VCC and how it can benefit you.
What is a Variable Capital Company (VCC)?
A Variable Capital Company (VCC) is a new corporate entity type launched in Singapore on 31 January 2019. A VCC can be either a privately owned company limited by per shares or a public company and offers flexibility in corporate governance and fundraising.
A VCC is different from a traditional company in that it has a variable share capital, which refers to the fact that the total number of shares issued by the company can be increased or decreased as needed. This allows the company to raise additional funds through share issuance when necessary, without going through a lengthy and complicated process of amending its Memorandum and Articles of Association (M&AA).
The VCC structure is also more flexible when it comes to corporate governance. For example, a VCC can have a single shareholder, which is impossible with a traditional company. Additionally, the board of directors of a VCC can decide on the distribution of profits among shareholders as they see fit, without being bound by any preset rules or regulations.
Lastly, a VCC is not subject to some restrictions that apply to traditional companies, such as having at least two directors or needing an audit committee. This makes it ideal for startups and small businesses that want to minimize compliance costs and simplify operations.
What is the benefit of setting up a VCC in Singapore?
A Variable Capital Company (VCC) is a new corporate vehicle introduced in Singapore in January 2019. VCCs are flexible and can be utilized for a wide range of purposes, making them an attractive option for businesses looking to set up in Singapore.
Some benefits of setting up a VCC in Singapore include the following:
- Flexibility: VCCs are highly flexible and can be used for many purposes, including investing in startups, private equity and venture capital funds, real estate investment trusts (REITs), and more.
- Cost-effective: Setting up a VCC is more cost-effective than setting up a traditional company, as there is no need to appoint auditors or file annual returns.
- Tax efficiency: VCCs are tax-efficient as they are exempt from corporate tax on capital gains and dividends.
- Simplicity: Setting up a VCC is relatively straightforward.
Some key features of a VCC
A VCC is a company that can raise capital through the sale of shares. The main advantage of a VCC is that it can offer shareholders various benefits, including the ability to invest and put money in a wide range of companies and receive tax breaks on their investments.
Some key features of a VCC include:
-The ability to offer shareholders a variety of benefits
-The ability to invest in a wide range of companies
-Receive tax breaks on their investments
How to set up a VCC in Singapore
If you are thinking of starting a Variable Capital Company in Singapore, here is a step-by-step on how to do it:
- First, you must incorporate a private company limited by shares with the Accounting and Corporate Regulatory Authority (ACRA). You need to provide and submit the following documents:
– Memorandum and Articles of Association
– Notice of Situation of Registered Office
– Form 48A (Notice of Appointment of Company Secretary)
– Form 44 (Declaration of Compliance with the Constitution)
- After your company has been incorporated, you will need to obtain an Investment Adviser Licence from the Monetary Authority of Singapore (MAS).
- Once you have obtained the Investment Adviser Licence, you can apply to MAS for permission to operate as a VCC.
- You will need to submit the documents when applying for permission to operate as a VCC:
– Business Plan
– Detailed Organizational Structure
– List of Directors and Shareholders
– Investment Advisory Agreement
- If MAS approves your application, you will be issued a VCC Certificate.
- You can then start operating your VCC in Singapore.
Conclusion
A Variable Capital Company (VCC) is a new corporate entity introduced in Singapore. VCCs are designed to provide flexibility for fund managers in the structure and operation of their funds. The key features of a VCC include: -The ability to issue multiple class of shares, each with different rights and privileges; -Flexibility in the types of investments that can be made; and -Enhanced investor protection through the segregation of assets. A VCC may be the right choice if you are considering setting up a fund in Singapore. Discuss with your accountant or financial advisor to learn more about VCCs and whether they suit your needs.
