Lecture on Variable Capital Companies (VCC) in Singapore

Introduction

• Inception: Introduced in January 2020.
• Current Statistics (as of October 2024):
  • 1,117 VCCs incorporated in Singapore.
  • Over 2,000 sub-funds registered under VCCs.

Purpose of VCC

• Main Objective: Serve as a collective investment scheme.
• Legal Framework: Incorporated under the Variable Capital Companies Act, not the general Companies Act.

Similarities with Private Limited Companies

• Corporate Structure:
  • Presence of shareholders.
  • Operated by a board of directors.
• Foreign Corporate Funds: Possible to redomicile as a VCC in Singapore.

Key Differences from Private Limited Companies

Structure

• Can be set up as:
  • Standalone VCC
  • Umbrella VCC: Must have two or more sub-funds but can start with one sub-fund.

Management

• Licensed Fund Manager Required: Must be managed by a licensed Singapore fund manager.
• Foreign Fund Managers:
  • Must collaborate with a local fund manager or become licensed in Singapore.

Directors

• Residency Requirement: At least one director must be ordinarily resident in Singapore.
• Fund Manager Representation:
  • At least one director must be a qualified representative or director of the fund manager.
  • This director can also fulfill the residency requirement.

Authorized VCC Scheme

• Retail Public Offering:
  • Requires three directors.
  • One director must be independent from all parties.

Conclusion

• VCCs as Investment Vehicles: Designed to create flexible investment structures while aligning with legal requirements for collective investment schemes.