Entail Holdings Pte. Ltd. recently established a new fund in Singapore in the form of the variable capital company (VCC). Launched in January this year, the VCC is a new corporate structure for all types of investment funds in Singapore. A VCC can be set up as a standalone entity or as an umbrella entity with multiple sub-funds. In the latter structure, each sub-fund can be structured with its own distinct investment objective and strategy, investors, assets and liabilities.

The VCC structure provides greater flexibility as compared to existing fund structures in Singapore, as well as additional structuring options for Singapore-based fund managers who wish to set up a new investment fund in Singapore.

The CEO and President of Entail Holdings Pte. Ltd., Mike Sim Boon Cheok, shared that “the VCC framework has greatly benefitted clients, as it is similar to other fund structures that have enjoyed success globally, such as the SICAV and the ICAV in countries such as Luxembourg and Ireland. I am heartened that the future of Singapore investment funds shines brighter now, thanks to the introduction of this new fund structure”.

Sim currently runs and manages a platform for fund managers of hedge funds, private equity funds and property funds, which is equipped to provide aspiring fund managers with guidance on the establishment of a VCC. This platform was built alongside the winner of the Monetary Authority of Singapore FinTech Awards in 2019.

VCC Flexibility

A VCC can be used for any type of investment strategies in Singapore, including the following:

• Authorised mutual funds
• Restricted mutual funds
• Exempt mutual funds
• Restricted hedge funds
• Exempt hedge funds
• Restricted private equity and real estate funds
• Exempt private equity and real estate funds

Benefits of a VCC

Some of the benefits of a VCC include the following:

• Financial statements are not required to be made public
• It can be used as a pooling and investing vehicle
• It works as an option in the wealth management industry
• Improved tax and operational efficiencies, including a withholding tax exemption and the availability of Goods and Services Tax (GST) remission

“The introduction of the VCC structure certainly provides the Singapore investment scene with a global competitive edge in investment holdings, while granting flexibility to its investors. This makes Singapore an enticing location for investors who wish to build their investment portfolios in Singapore.” says Sim.