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The main feature of the VCFM (Variable Capital Company Fund Management) license is that it must invest 80% of its committed capital in particular services or products. These products must be incorporated for at most ten years before the first investment by unlisted enterprises. Any follow-up investments on the products qualify even if the products’ incorporation took place over ten years ago when the follow-up investment is released.
These facts explain that the VCFM license is Singapore’s permit of funds’ investments in unlisted startups. MAS expects the VCFM to only make investments in unlisted companies. Note that these funds can’t invest in public and listed securities. However, a VCFM may hold listed securities in some particular cases. Such instances include if the fund purchased the securities before the company before its listing. Why is that? It is because MAS doesn’t expect the VCFM to withdraw its investment after a company becomes listed. If your entity is in this category, then the Singapore VCFM License is necessary.
When you submit your application form, MAS expected processing time ranges between two to three months. They take up this time to review the requirements and other details and process your application. However, this short period is only applicable for well-defined and straightforward applications that meet the admission requirement criteria. MAS may take more than three months for exceptional cases like an incomplete application form and inaccurate data.
With these facts, a professional is a basic need as you apply for the VCFM license and one of the best options is our website. We offer 24/7 services, and you gain access to a team of experts to help you in the application process.
After applying for the best VCFM license, MAS requires you to pay S$4000 during the registration process.
Suppose you want to invest in a new product in Singapore under a startup company; this license is relevant. It allows you to make investments in these small companies legally.
VCFM license require minimum requirement from MAS as compared to RFMC or LFMC. Post licenses approval, compliances are less and easy for the funds.
MAS is strict with its financial regulatory framework and imposes severe penalties for non-compliance. Therefore, if you want to invest in small companies, getting the VCFM license is the best option.
As mentioned above, the VCFM License is most suitable for Venture Capital fund management entity. Therefore, there are several application requirements that you must meet before MAS approves your license.
Unlike other licenses, MAS doesn’t require a VCFM to have a minimum base capital
A Singaporean entity seeking authorization to direct venture capital fund investments needs a VCFM License otherwise known as a Venture Capital Fund Manager License. Under the Variable Capital Company (VCC) structure this license grants operational flexibility with improved compliance requirements. All essential information about VCFM License application in Singapore is presented in this guide.
Step 1: Confirm Eligibility
The company must determine if they meet the eligibility criteria set out by the MAS for VCFM registration. This includes requirements such as having a permanent place of business in Singapore and a competent and fit-and-proper management team.
Step 2: Prepare Required Documents
The VCFM license application under MAS demands essential documentation consisting of an application form together with a business plan showing VCC structure and compliance manual besides financial projections and proof documenting AML/CFT policy compliance for regulatory purposes.
Step 3: Submit the Application to MAS
Submit your application through MAS’ online portal. The processing time should be 2–3 months for properly prepared submissions. A content submission processed with good preparation will typically need 2–3 months for completion.
Step 4: Application Review by MAS
The MAS will review the application. It may also conduct on-site inspections and interviews with key personnel to assess the company’s compliance and risk management processes.
Step 5: Receive Outcome After reviewing the application, the MAS will either approve or reject the application. If the application is rejected, the company will be given a reason for the rejection and one is free to appeal the decision.
Step 6: Compliance with License Requirements
Once the VCFM license is issued, you must comply with ongoing reporting requirements and periodic inspections.
Should your license application be rejected, you may have the option to appeal the decision. Follow these steps to appeal the rejection :
Singapore introduced the Variable Capital Company (VCC) as its latest corporate structure to handle investment funds exclusively. Professional fund managers can access operational benefits through the VCC framework introduced in January 2020 that supports Singapore’s position as a top global fund management center.
The Variable Capital Company operates as a specialized legal framework designed for investment fund management operations. A VCC functions either as a standalone entity or as a diversified fund that contains different sub-funds maintaining their own assets and liabilities.
When managed by one entity a Single Fund VCC maintains its financial assets in a common investment pool. The VCC structure supports independent investment plans as well as fund management setups that avoid separate management of different investments or investor pools.
An Umbrella Fund VCC houses multiple sub-funds under a single VCC legal entity. The sub-funds of an Umbrella Fund VCC possess independent assets and liabilities together with target objectives and investor sets although they maintain a legal connection to their parent organization.
1. Operational Efficiency
Fund managers experience reduced administrative and compliance expenses when they use umbrella VCCs to unite fund operations with governance functions and service providers from several funds.
2. Enhanced Flexibility
Regular share allocation and redemption at net asset value (NAV) becomes feasible under the VCC structure since court authorization is not required. Cash flow flexibility arises when VCC pays dividends using its capital fund.
3. Confidentiality
A VCC stand apart from standard Singapore organizations because it requires no obligation to reveal its register of shareholders to the public which protects investor privacy rights.
4. Tax Incentives and Regulatory Support
Through Section 13O and Section 13U of the Income Tax Act Singapore grants tax exemptions so that VCCs can benefit from this provision.
A VCC functions under GST rules and FATCA/CRS taxation as a company for GST requirements and as a financial institution for FATCA and CRS compliance systems.
5. Global Competitiveness
Singapore has improved its position as an asset management and fund domiciliation center through the VCC regime by competing against established fund locations including the Cayman Islands and Luxembourg.
6. Broad Applicability
A VCC structure enables organizations to pursue different investment approaches which include:
VCFM deals with funds’ investments in unlisted companies and their products that must not be incorporated within more than ten years before the official application day.
VCFM company cannot make investments in listed companies. However, when their investments date back before a company is listed, they remain under its name.
The VCFM doesn’t require minimum base capital and risk-based capital; hence you don’t have to worry about the money.
Singapore is strict with its regulatory framework; hence there are legal consequences when running an LFMC without the necessary license.
Yes. But, MAS only requires it to submit an annual declaration within a month before the financial year ends
The VCFM must undergo an annual internal audit
Every business enterprise in Singapore undertakes funds’ investments in unlisted companies to promote innovation.