Understanding the Singapore Variable Capital Company (S-VACC)


On 23 March 2017, the Monetary Authority of Singapore (MAS) announced the public consultation of the Singapore Variable Capital Company (S-VACC) legislation, marking the city-state’s latest investment fund innovation. Here, we highlight some of the key aspects of the S-VACC and how it will elevate Singapore’s position in becoming a globally competitive fund domicile.
 

At a glance


What is a S-VACC?

A S-VACC is a new legal entity/structure for investment fund.

What can it be used for?

It can be used for traditional and alternative fund strategies (both openended and close-ended).

How can it be set up?

It can be set up as an umbrella entity with multiple sub-funds.

Can a foreign fund be re-domiciled?

Foreign corporate entities set up as funds could be inward re-domiciled as S-VACCs.


What are the benefits?

Some of the benefits include improved operational and tax efficiency.

It can be used …

  • for a variety of investment strategies (viz., traditional, hedge funds, private equity and real estate funds);
  • to list funds as information listing and for trading purposes; and
  • as a pooling and investing vehicle, thereby dispensing multiple tiered fund structures.

It could also avail itself of the US “check-the-box” election.
 


What are the requirements of a S-VACC?

Capital

The capital of a S-VACC will always be equal to its net assets, thereby providing flexibility in the distribution and reduction of capital.
 

Fund manager

It will require a Singapore-based licensed or regulated fund manager, unless exempted under the regulations; currently fund managers exempt from regulations (viz., real estate and related party exemption) cannot use a S-VACC.
 

Securities and Futures Act (SFA)

Existing Securities and Futures Act (SFA) requirements for investment funds will apply to S-VACCs.
 

Board of Directors

It must have at least one Singapore resident director for non-authorised schemes and at least three directors for authorised schemes.
 

Registered office & secretary

It must have its registered office in Singapore and must appoint a Singapore-based company secretary.

 

Financial reporting

It must be subject to audit by a Singapore-based auditor and must present its financial statements as per IFRS or Singapore FRS.
 



How will S-VACC enhance Singapore’s asset management industry?

The Singapore Variable Capital Company (S-VACC)

Detailed briefing paper

Understand the important aspects of the S-VACC bill and its associated regulations as they stand in MAS' consultation paper released on 23 March 2017.

The Singapore Variable Capital Company (S-VACC)

At a glance

A 3-minute guide to what constitutes a S-VACC, its benefits and requirements, as well as how it enhances Singapore’s asset management industry.


Visit the Monetary Authority of Singapore’s (MAS) webpage for the S-VACC bill and the consultation paper.
 

Contact us

Justin Ong
Asia Pacific Asset and Wealth Management Leader
Tel: +65 6236 3708
Email

Armin Choksey
Head of Asian Investment Fund Centre
Tel: +65 6236 4648
Email

Anuj Kagalwala
Partner, Asset & Wealth Management Tax Leader
Tel: +65 6236 3822
Email

Tan Hui Cheng
Partner, Asset & Wealth Management Tax
Tel: +65 6236 7557
Email

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