so the agenda for today I'm going to break it up into three parts starting with the key features of the VCC and secondly I'm gonna compare between the VCC and another well-known structure in the region the Kaman SPC lastly the VCC is being touted as a game-changer so what's the hype all about how can we make use of VCC to our advantage let's begin key features of the VCC this is a new corporate structure launched on the 15th of January 2020 by the Monetary Authority of Singapore mas and the company registra what we call the Accra in Singapore the addition of BCC to complement the editing suite of fun investment vehicles is key to increasing kippur value value proposition as an asset and wealth management huh both in the region and globally by introducing a number of special features this customized corporate structure will overcome the shortcoming of existing company law expects which I'm gonna talk about in the next slide next slide the challenges of company from fun before we go into the VCC proper let's take a step back to understand why Singapore had to do this Singapore as a country offers a wide range of fun investment vehicles in the form of limited partnership unit trusts Private Limited companies real estate investment trusts so why VCC what are the current challenges number one the lack of variable capital structure the Singapore corporation our vehicles will fix capital typically an investment fund should offer the shareholder the freedom to invest in or out of the structure through subscription or redemption the motion of the variable capital provision is critical to the sub to the operation of the investment fund which today under the Singapore Corporation Act being a fixed capital structure doesn't allow number two sovereigns it has fund set up as corporation are required a cultural solvency test before any repayment of capital and this is a harder and can be proved challenging em initiatively number three privacy issues the shareholder list for Singapore corporations is publicly available I can go to the Singapore company registra the Accra website I pay a small fee I can download the shareholder list and see everything in it privacy is very important in wealth management and you wouldn't want to let everybody know why we've got number four classification of belieber redeemable chess Singapore files are usually classified in of our Redeemer redeemable preferred shares this can be a challenge relevancy tests are conducted before any capital Redemption next slide what is the VCC a VCC is a new lever structure providing for investment funds to be Demelza in Singapore it is incorporated under the VCC egg and not the Companies Act therefore its aim is to provide an alternative to existing fan and collective investment schemes such as unit trust partnerships corporations etc to overcome the challenges described in the previous slide number two a BCC can be used as both open end and closed and the fan and it is flexible it is suitable for a wide range of investment strategies now let's look at the key features number one stand alone or umbrella family a VCC can be set up as an umbrella structure with multiple numbers of sub bands there can be as many suffice as you could you can also have both open under as well as close ended sub funds in one umbrella structure you can also have different regulator regimes for difference of funds under one umbrella structure you can have the flexibility in structuring and administering for standalone fun having one shareholder allows for a master feeder structure which I will explain later for umbrella fan each sub fan can pursue is own years investment strategies next slide segregation of SS and liability for umbrella fan as mentioned you can have as many supplies see one each with his own mended and each other some phone will be ringing fans so whatever happens to a certain one will not affect some fun two and three and four however is the beauty of the Board of Directors to make sure there's adequate checks and balances in place in the operation and VCC as a whole is considered as one company one liquor entity depending on your strategies these features can be extremely useful next slide flexibility in share capital I'm going to spend a bit longer on this light because this is ultimately what the investors invest in and the share capital is always equal to net asset value because the VCC measures the SS and liability at fair value at every point in time therefore whenever distribution arm aid is available it is made of income or capital and you define the rules of the game in the Constitution you may be sent home the distribution will be made and from which pockets whether is it from income or from capital you are free to do so in your investors communication there's no statutory declaration like that is in the Singapore Companies Act you have to issue and redeem shares at net asset value this can also allow you to incorporate some kind of charges for example if you want to include the redemption fee the fun and load the back-end load is a lot as long as it starts off from the nav of the shares you can go in and out true Redemption in-kind not necessary in cash and switching is allowed between the sub funds a BCC may also issue different classes of shares with different rights and dividend payment as long as it stated clearly in the BCC Constitution and lastly there's an imposition of a fair value the family doesn't mean at the point a standard party for measuring the fair value you can even do so as long as it's tough on the people who are doing investment transactions next slide facts inability with the corporate corporate structure as pension no service it has before any repayment or redemption visas is able to issue and redeem shares without having to get shareholders approval this allows investors to exit their investment as they wish providing a much-needed flexibility next slide please privacy as mentioned the visas is registered with the Accra and naughty right regulator is with the company registrar and not the MAS other key features such as the wider scope of accounting standards to attract foreign funds and set for retail VCC which uses the Singapore rep 7 accounting standard financial statements for the BCC can prepare using the S FRS the IFRS or the US GAAP as well as the 13 R and the 13 X Tax Incentive can be extended to VCC which I will share more later and also the cherry pop the election is a very attractive for us investors for funds they have us investors the key benefit or the VCC is - it is eligible for the u.s. check the box election which allows a fun to be treated as transparent for the purpose of US federal income tax this means that any US investors is placed in the same tax position as if they had invested early in the underlying investments of the VCC and lastly there are two ways to set up a BCC number one is to incorporate a brand new VCC and number two you can also read the muscle you're a system fan from overseas to Singapore and to attract the overseas fan to set up a BCC in Singapore we have already made these features very streamline and the process to be very efficient next slide so far I hope the features of the BCC are clear and how they have overcome the challenges posed by the Singapore corporation in the past and I would like to emphasize here that the features of VCC is not any different from what we are used to in an investment fund which can be located in Cayman Island Mauritius BBI Luxembourg Ireland etc why we are breaking down these features into various pieces because once you break it down you understand the features of the BCC you're able to make mental notes how you are able to use it for your own investment structure so which I'm gonna talk about shortly next slide to setup a BCC you need to invite these people into the party number one you need a fun lawyer to drop out the legal documents number two you need a Singapore base fun demonstrator to calculate the nav etc number three you need a fun auditor and also you need a company secretary and you need to have a registered office in Singapore but lastly you need to be licensed as a fund manager and if they are not and if you're not exempted you need to work with one lesson and TV which I'm gonna talk about in the next slide who can set up a BCC a BCC must be managed by a fund manager licensed or regulated by the MAS unless exempted and under the fund management regime in Singapore there are two main assumptions from holding a separate capital market licence number one the financial institution it can be am Bank the commercial bank merchant bank whatever or he can be an insurance company they are regulated by the MAS and the Center for having a separate file management license because a part of as part of their business they are already making investments so they do have to have an additional license just for fund management and number two if you are making your own money managing your own money your own proprietary assets you don't need a separate capital market license and all of these to SFO cannot launch a BCC but that does not mean that SFO is excluded as an investor class from launching a VC C if SM all finds the BCC useful they can get that instant license as a file manager to launch it or we can look for another file manager in the marketplace like reference family office who hosts the Capital Markets a business license to launch a VC C next slide now after setting are the hard facts about the various features of the VC C let's look at how we can utilize them and over here I'm not going to share how five managers like myself can utilize the VCC I'm gonna show you from an employee investor point of view since most of the attendees here today are investors or single-family office next slide one word of caution here you have to consult your legal and tax counselor before consulting a VC C number one you can use it as a wealth management consolidation over here you can see there are four different high net worth individuals investing in four different asset classes a VC C can organize separately managed accounts in to umbrella BCC structure and offer similar or variety of terms to investors the flexibility of pulling investors into a structure like a VC C would unwind them the investor base by lowering the minimum entry level if you are aiming for the tax incentive which I'm going to talk about later in the presentation having a BCC structure can significantly lower the minimum entry level and costs the pooling of investments and managing accounts collectively will lead to cost and operational efficiency next slide secondly the ability to pool investors and organize them in different combinations and some funds if investors the flexibility to pursue a different mix of different strategy over here instead of having four different divisions as described earlier we have one super ultra high net worth individual one or one single family investing in different asset classes organizing these investments into an umbrella fan structure allows for consolidation and having a better overview of the investments next slide Private Wealth planning as mentioned earlier a VCC overcomes the hoverin limitation of the corporation egg when used for investment funds therefore it provides enhanced offerings to high net worth individuals boosting Singapore's value propositions in the private wealth industry on the left before the 15 On January 20 20 single company is used is typically used to hole SS under a Singapore trust the Singapore Cobra will then apply for a tax in that incentive known as the tapping are ordered in X number one there are limitations such as privacy shareholder this can be downloaded and exposed knowing anyone to download from the across Singapore website number two you cannot comment the lies Singapore corporation in two different parts like in the umbrella final and number three every time you reach our capital you need to contact a solvency test this can be a burden and above all we have to ensure the capital structure is properly developed so that you don't get into complication of redeemable preferred shares which we have implications in the solvency test after the 15 on January 10 it will be on the right if you replace the Singapore corporation under the Singapore trust with the VCC which is required to apply for the tab index or patina on an umbrella level but this is only a one-time application and you can do a wave or the noises that the Singapore corporation comes with it as mentioned earlier the additional features is the creation of compartments or some funds which allow you to put your different SS across different beneficiary under one umbrella or allow you to manage different strategies under one umbrella structure next slide tiered structure creating a VCC as an umbrella allows pooling of investors in broad categories of which can then be properly allocated across further investors such pooling will improve the efficiency by removing the additional immensitively here across difference fine structures as you can see in this th structure the umbrella BCC structure can be used to facilitate economies of skill in dealing with a collection of segregated some funds while allowing some flexibility in the allocation between the strategies to be provided to investors in a tiered structure of umbrella BCC as you can see on the top the investors ho shares in some funds in VC C 1 which invests into the Sun fans of VC C 2 in various amounts the obesity to such fun allows segregated dealings in the different asset classes being invested in this example long equity shot equity and bonds the BCC ones are fine alone for different education into the underlying investment energies through variation in the amount each of the BCC one finds home in the BCC to Sutphin next slide master feeder structure so a BCC can hold single investors and how a single asset so this provide the VCC the ability to have a master feeder structure and this structure can be based in Singapore to accommodate us investors for instance that except our tax exam the whole assessed in other markets to allow investors to assess different fund on my sauce they are normally restricted due to regulatory regimes for example the uses or the AI FMD for example a US president or investors the BCC had the feature that were enabled each amiable election investors will put capital into a respective feeder fund which ultimately invests SS into the master Fung the master fan is responsible for making or for new investments and conducting or trading activities while managing and perform while the management and performance fee are paid at a fee next night now after saving all the features and the usage of VCC let's do an Apple to Apple comparison with the Cayman S PC across the board VCC and SBC are very similar but there are some differences red first family office is one of the first a team to launch the VCC on the 15 on January and a span of the pilot program we will ask my the MAS for our feedback on the structure and I think it's important that we do not create a completely new vehicle which the industry is unfamiliar with or will take a long time to get used to over the next few slides we will compare the VCC with another corporate structure there is a popular in this region using him as an example VCC is categorized into two main categories number one the authorized VCC which is for the retail investors the men on the streets and secondly B will be that we restrict the VCC for accredited investors and exempted for small offering private placements and investor schemes in those of a legal framework is more or less the same just using different authorities using different name in different countries next slide from government's point of view for reshoot the VCC you need to have one as a creative director and at least one independent director for caiman only one director is required and for authorized VCC for the retail investors for the men on the street you need three directors for obvious reason for Singapore VCC the right director must be a resident of Singapore for Kaman no such thing and the director independent depends if your VCC is for the men on the street or not so if he's for the men on the street you need to be independent whereas for the visual tourism the VCC there's no need and lastly the fund management director is not required in Kaman in Singapore yes it's required so it's like fund management the location of a manager has to being seen in Singapore for the BCC because the whole point of this is to attract the inflow of funds into Singapore to boost the Singapore ecosystem for Kaman no such thing it can be anywhere in the world both do not have a minimum capital to start although there is no minimum capital is that because of the cost associated with setting of the VCC as I mentioned earlier you need to have a lawyer you need to have a fundraiser in a fund or dipper and copper secretary there because involved and all together depending on the investment mandate and depending on the complexity it will cost between around 50 to 80 K if you are setting up a sub fun so if your fan size is only about 1 million US dollars you can still do it but you wouldn't make much sense and both allow for rhythm isolation this is he a Singapore resident body called blood which means is entitled to 86 double-taxation agreement that Singapore has and in Cayman no such thing and this is I believe one of the strong advantage that the BCC has over the SPC and there's no need to file tax return for the BCC Kaymer no because that knows our concept in Cayman and check the box election both are applicable next slide from accounting point of view as mentioned just now because think about wants to attract the the foreign funds coming in so that's why besides the Singapore accounting standard Singapore financial reporting standard we also allow the International Financial Reporting Center and the US GAAP and you need to have a financial statement at every stop fund level yes and financial statements are not publicly available the BCC financial statement has to be found with the company registra the Accra and not the MAS whereas for Cayman it's been found with the SEMA the second creation function of the SSN liability of the BCC is much stronger but comparable to the SPC and as far as taxation is concerned VCC are liable to text must our tax return and another year whereas Cayman are tax exempt next slide please VCC requires a Singapore company secretary to be in Singapore whereas Cayman doesn't need a company secretary but needs to use a register office in the Cayman Island for the BCC find a machine that has to be in Singapore for Cayman only for a mr. fun a special category of fun in a Cayman Island has to be it has to use a Cayman Cayman Cayman funny I mean but 90% of the world uses the non administrative funds and if the if the fine is not a PE on a real estate BCC requires a custodian but it can be anywhere in the world as long as it regulator as a custodian in that jurisdiction in Cayman no such thing for VCC auditor has to be Singapore base and use a singapore-based accountant Cayman requires an auditor to be based and registered in Cayman next night and finally for VCC you can list there's a ability to list and AGM not necessary and it's not necessary to have a the AGM yeah next slide so the key takeaway is as you can see the Singapore VCC and the Cayman SPC are not very different therefore it's not a new vehicle and something that which we are not familiar with as a body corporate structure setting above ECC will enhance the localization and thereby the ecosystem of Singapore and having a structure in Singapore you don't have to get up in the middle of the night to attend a board meeting or leave a country to Adam to attend about meeting of a Cayman fun therefore he enhances the efficiency and economics of running a structure in Singapore the hype surrounding VCC one month ago I was informed that 41 VCC have been set up and this is a become remarkable decobray comparing considering to this investment climate and VCC only started four months ago so after setting of the key features and after comparing with Cayman which is also based very similar was other hype about is there still a ground for Singapore to stand in this crowd and competitive fund management industry next slide as the second Minister of Finance miss Indrani Raja said the introduction of this corporate structure known as the variable capital company or VCC will be a game changer for Singapore's fund management industry Singapore is already widely recognized as the most stable and well-run investment center in Southeast Asia or in the world and the VCC will propel Singapore to global investments in as a true Quest Crew competitor to the Knights of Cayman Island and Luxembourg Singapore has long relied on the fundamentals of a transparent kaname low corporate tax structure political stability and efficiency to maintain investment appeal while this have surfacing about well it was still missing a flexible investment structure like the BCC and how will BCC change the game next slide BCC is not for everyone again I'm breaking up into three different categories of people that will benefit from the BCC obviously you'll benefit the local providers and fund managers like myself because if the decobray is good we will have more work to do and if the ecosystem is a cesspool Singapore benefit but today I'm going to share how it will benefit the investors that you and your clients next slide benefits for investors as described in the earlier features overcoming the challenges of Singapore corporation can be deemed as a Vantage number one all sapphires are insulated from one another which means was one insolvent such fun cannot affect other sub funds this should provide peace of mind for investors number two a BCC is a corporate or legal entity this means a BCC is able to echo for or on behalf of itself without a need to appoint a trustee offering much more freedom than unit trust obesity is so able to issue and redeem shares without having to get shareholders approval this allows investors to exceed their investments at the as they wish providing much-needed flexibility number for privacy because the VCC shareholders this does not make public number five and AGM can be dispensed and although the AGM is required in principle the BCC does not need to ho an AGM if it decides not to therefore for passive foreign investors this can be huge convenience number six if a BCC has some funds those funds can share the board of directors as well as using the service providers such as custodian fine Emily shredder passing down those savings to the investors and you will make the BCC very cost-efficient number seven because the VCC can have a single shareholder to just who a single asset it can be used as a master feeder structure for favorable pass-through tax treatment number it income from eligible BCC fund may be tax-free if they qualify for the 13 car or 13 X which I'm going to talk about in the next slide next slide why that in our for 13 X and one of the very frequently asked question I get here is why do we talk about tax incentive many people have asked me since the structure in came an ameba are similar why Singapore my answer would be if you manage those structures if you manage those offshore structures from Singapore and you take all the decisions from Singapore having those structures in Cayman goes to be subjected to Singapore tax and that's why you have to consider tax incentive to get protection on those structures additionally Infineon Eyebeam came and introduced the economic substance law and in 2020 Cayman interest introduced the private fund law therefore having an economic substance is critical here next slide comparison within the Department of index basically for the dinar the legal form and location has to be a Singapore company or BCC you must be managed by a singapore-based fund management company there's no fan size requirement there are certain investors position but if the fire is owned by individual you must satisfy the investor relation there'll be at least of a 200k Singapore dollars business spending on the fun level and you need to hire one investment professional professional and you get one employment pass for them if you decide to hire a foreigner for 13x there's no restriction on the legal form and location so the fun can be Cayman BVI II can be a trust it can be a Singapore company is your choice but there's a minimum 15 million Singapore dollars at the point of application and three investment professionals because of the 15 million in the tree investor professionals mas s remove the ownership restriction so you can have a more flexible structure possible the two hurricane loca spending is also on umbrella level and one of the frequently asked question here is can the BCC gain PR status in Singapore and one of the my short answer is no if you want to have a straightforward route you need to have a unique consider the global investor program the GIP program but this is not the agenda for today Samina you can apply for the EP but after a black four EP you can apply for the PR but there will still be subjected to approval from the ICA next slide and shed earlier before the 15 on January 1 client has to set up a sub fun or sub set up a fan sorry and apply for the 13 are ordered in X adsorbing order caused by himself after the 15 on January if you set up an umbrella fine structure if you say sorry if I said about suffer under never umbrella for structure there'll be economies of scale next slide so now let's look at YB 13 our umbrella text assumption is critical here why the tax incentive applying on umbrella level is better than on a single company level on the Left okay you can see therefore that in our there is a shareholder or ownership restriction which means that investor in the tub in our fund is split into the so-called good or bad investors and one of the categories of bet investors is Singapore copper investors holding more than 13 30 percent of the stud in our company so on the left you can see the Singapore corporate investor owns 40% others in our company the ruse is that if a Singapore corporate investor has more than 30% of added in our company the Singapore copper investor is a bad investor otherwise known as the non qualifying relevant owner and he has to pay a penalty and the penalty is 17% on his shares of the profit of the in our company on the right you see that if the same structure is created using the BCC you can create a BCC with rusev funds you can see that on the right the 40% on - copper investors actually becomes 20% as a whole which is less than 30% requirement and therefore the investors becomes from big turns to a good investor which is not really not liable to the penalty this shows that how the using an umbrella structure can work to your advantage rather than using a normal normal company to set up that in our final next slide now let's look at the the next umbrella text structure so if you set up a for the d-max funds as normal companies you will need 200 million because the minimum is 50 million to stun and compare this with this study next VCC and for some funds 50 million on umbrella level and not on some level and 200k business spending on umbrella level in still a hundred K and once you apply for the study in our text application tax incentive application there will be no fresh application required for new sub funds therefore this can be served as a plug-and-play model if you decide to work with a fine manager who already has a BCC umbrella by running mix like application of tax exemption timeline in short the whole process will take about six months number one you need to decide on a fine structure number two you need to do some housekeeping in terms of the regulatory aspects number three you will me the MAS you mes will connect in the view and do these in the form of Hong Kong and after that you get what we call the mustnít IB to do off of two to four weeks later you get a mass net ID and when you get a master ID you can file for that in our and that index everything is done online at the moment and once you submit that in our enter the next application you'll be a proof between eight to twelve weeks and into this climate it might be deep study longer and after that once its approval ready then you have to then you're able to launch your fun with the tax incentive so over here one of the frequently asked question is do I need to have the investment professionals maybe before they file the application and do I need to have the investment management investment Mandy agreement executed if I file both answer is yes for the 13x do I need to get three full-time singapore-based professionals yes they have to be based in Singapore but of course they can travel for work and do note the the other texts that we are talking about is talking about economic substance here but over here there would be a bottleneck number one time is of the essence six months is a long time we have met clients who decided to go all alone instead of camping coming into under an umbrella and six months later after getting the the but in our tax incentive we don't know how to proceed due to the lack of know-how of how to operate a fun and of course if you do not have such a huge AUM there will be it doesn't make sense because there'll be these economies of skill so I have six more minutes before any presentation I hope you find the features or the BCC useful and I certainly do and looking at the debris in the past few months the outlook is very rosy and I'm gonna share how to set up a BCC there are two ways to set up a PCC number one incorporation firstly you need to do a bit of housekeeping apply for the name first before the actual incorporation filing the BCC name application costs 15 Singapore dollars there'll be a suffix or the BCC entity and I think do y'all do a BCC and after that you can audit documentation ready as far as the Constitution is concerned the Constitution has to be launching the Accra the company register register and not the regulator mas you don't have to go to mes to launch a DCC unless it's meant for the original public for alternate fun products such as hedge fund private equity real estate the process only enforcing cooperation and go to the Accra then you determine the directors the company circuitry the local address the Accra will take an application form the registration fee is 8,000 Singapore dollars and if you are launching the umbrella fun and for each addition some fun you only need to pay for higher Singapore dollars and within 14 days the Accra will respond with this certificate of incorporation and that is a lot faster than our other jurisdiction things like read on my silly Asian fine number one fun must meet the definition of a collective investment scheme of Singapore which is a normal investment fund and wherever you don't read um us out you must be a body corporate another foreign limited partnership or foreign unique trust and it must be of a same structure cannot be an umbrella in Cayman and then you read them into a funny singapore and one of the questions i got yesterday is if you decide to read um you're exiting fund from overseas to Singapore you can take the history and the performance with you therefore it's not a breakup and you gotta start everything afresh you can take all those performance with you to Singapore and number three most importantly you from where you read almost all you must find a country that now minimization provision and in most radiation like the Cayman be by Mauritius they allow our freedom isolation number three you can also consider setting about some fun and anything umbrella and refers family office umbrella for instance so there will be number one there'll be a meeting with all the parties involved in the VCC ecosystem and today is a form of Hong Kong or the zoo meeting such as the fan on your phone I mean if required to for us to better understand the structure and a set amount of bcc's are fun and in order for them to draft and prepare the legal documents after that you have to complete our ddq and for a comprehensive review as part of our AML and kyc requirement we need to be be their investors as well number three once we have a the above steps a week and computer data of engagements will be office will be issue and sign within us and the professional parties involve you then provide an MoU to be signed and the payment of initial deposit as well so now I have company and the end of my presentation to summarize firstly I took a step back and started with the noxus and analyze what is what was what were the challenges of exiting fun because in Singapore then how VCC can overcome those limitation and come up with the solutions then I did an apple to Apple comparison with in Singapore BCC and Cayman SPC and found a structurally PCC is not something new and as a matter of fact as this in other jurisdictions as well such as the sea caffeine assemble and CK in in English it it's actually a shop phone for you know of a French word but in English it means investment companies with variable capital which is more or less the same as variable capital company as well and so we have the SPC in the Cayman as described and the OFC in Hong Kong therefore this is not a newbie and although Singapore is have been to live to the game but having said that I believe that this is an advantage because we can use the lesson than buy those markets to create and competitive advantage for Singapore and also a lot of actions are happening in this part of the world and in Asia Singapore is very well positioned mas and the Accra has spent a few years to develop this and put a lot of thought into it so I believe that this periodic Singapore to the next level this is it