How to Launch a Venture Capital Fund in Singapore

Singapore VC funds have become the go-to for savvy fund managers who want access to Asia’s booming startup scene without drowning in red tape. With a pro-business environment, clear regulations, and attractive tax incentives, Singapore makes it founder-friendly to launch and scale a fund.

In this guide, we’ll walk you through how to set up your own Singapore VC fund and position it for long-term success.

Why Singapore VC Funds Are Attracting Investors

Singapore has cemented its reputation as one of the most dynamic startup ecosystems in the world, drawing entrepreneurs, venture capitalists, and family offices alike. Its strategic location in Southeast Asia, transparent regulations, and investor-friendly policies make it a natural hub for capital formation.

This didn’t happen overnight. Singapore’s government first laid the foundation back in 1991 through the National Technology Plan, designed to strengthen science and technology capabilities. Since then, initiatives like Startup SG, Enterprise Singapore, and the Economic Development Board (EDB) have expanded access to funding, mentorship, and international networks.

The city-state is also home to accelerators, incubators, and co-working spaces that enable startups to scale rapidly. For venture capitalists, Singapore offers three core advantages:

• A predictable regulatory framework that reduces friction for fund managers.
• Deep tax treaty networks (DTAs) that minimize withholding tax on cross-border income.
• A progressive stance on deep tech and innovation, expected to shape the next decade of growth.

MAS Licensing Requirements for VC Fund Managers

In Singapore, anyone managing venture capital funds must obtain a Venture Capital Fund Manager (VCFM) licence from the Monetary Authority of Singapore (MAS). 

To qualify, managers must meet MAS’ “fit and proper” standards, which assess financial soundness, integrity, reputation, and professional conduct. MAS also acknowledges that venture capital investing benefits from diverse backgrounds and entrepreneurial experience. 

Key requirements under the VCFM licence include:

1. Corporate Structure – The management company must be incorporated in Singapore.
2. Board and Staffing – At least two directors and two full-time staff must be appointed.
3. Office Premises – A dedicated private office in Singapore is required to house staff and operations.
4. Fund Scope – VCFM licensees may only manage venture capital funds under this regime.
5. Use of Service Providers – Any outsourcing of functions must comply with MAS’ Outsourcing Guidelines.

Ongoing obligations under the licence include:

1. AML/CFT Compliance – Strict adherence to MAS’ anti-money laundering and counter-terrorism financing standards
   
2. Misconduct Rules – Compliance with MAS’ standards on misconduct, ensuring integrity and accountability
3. Conflict Management – Identifying, avoiding, and managing potential conflicts of interest
4. Investor Disclosures – Providing all investors with clear, specific, and timely disclosures.

Traditionally, fund managers would handle all of this themselves, from setting up the entity, applying for the license, to managing compliance end-to-end. While effective, this route can be resource-heavy and slow.

That’s where Nova, a Fund-in-a-Box solution, comes in. Built for both first-time managers and seasoned professionals, Nova streamlines the entire journey, from structuring and licensing to fund operations.

Choosing the Right Fund Structure in Singapore

The first step in launching a fund is selecting the right structure. Singapore VC funds can be set up under several frameworks, but the most widely used today is the Variable Capital Company (VCC), introduced in 2020 for its flexibility and asset segregation benefits.

Here’s a quick comparison of available structures:

• Variable Capital Company (VCC): Allows multiple sub-funds under one umbrella, with flexibility in share issuance and redemption.
• Unit Trusts: Popular with hedge funds; assets are held by a trustee for investors.
• Limited Partnerships (LPs): Common for private equity and VC; partners share profits with varying liability levels.
• Private Companies: Traditional corporate vehicle for smaller funds.
• Business Trusts: Separate ownership and management, suitable for infrastructure projects or specialized assets.
• REITs (Real Estate Investment Trusts): For funds investing directly in real estate portfolios.

Not sure if a VCC or an SPV fits your strategy best? Schedule a call with our expert today and get clarity on the right vehicle for your goals.

Tax Incentives and Benefits for Singapore VC Funds

Singapore’s appeal is further enhanced by its robust tax incentive framework, designed to attract high-value economic activities. According to PwC, “Tax incentive applications are subject to detailed evaluation of an applicant’s business plans, requiring strong commitments to Singapore’s economy.”

It’s important to note that many of Singapore’s headline corporate incentives such as the Pioneer Incentive, Development and Expansion Incentive, and Double Tax Deduction scheme apply primarily to startups or corporates that VC funds may invest in. These do not directly affect the taxation of licensed VC Fund Managers.

For fund managers themselves, the most relevant exemptions fall under Singapore’s Income Tax Act, specifically Sections 13H, 13R, 13O, and 13U:

• Section 13H (Venture Capital Funds Incentive): Grants tax exemption on income from funds investing in unlisted Singapore-based companies, with fund managers of approved funds eligible for a 5% concessionary tax rate under the FMI (Fund Management Incentive) scheme.
• Section 13R (Onshore Fund Exemption): Applies to Singapore-incorporated and resident funds, offering exemption on specified income from designated investments.
• Section 13O (Enhanced Tier Fund Exemption): Applies to onshore Singapore funds, granting tax exemptions on specified gains provided the fund is tax resident in Singapore, managed locally, and meets business spending conditions.
• Section 13U (Enhanced Tier Fund Incentive for Large Funds): Grants tax exemptions on income from designated investments like stocks, bonds, and derivatives, for funds managed in Singapore with a minimum size of SGD 50M.

Step-by-Step: How to Launch Your VC Fund

Building a venture capital fund in Singapore requires more than securing capital; it’s about establishing credibility, structuring effectively, and operationalizing your fund. Here’s a step-by-step roadmap:

1. Build Your Track Record

Your track record reflects your past performance as an investor, including the types of investments you’ve made, why you made them, and the returns you’ve generated. Limited partners (LPs) evaluate key performance metrics such as:

• Total Value to Paid-In (TVPI)
• Multiple on Invested Capital (MOIC)
• Internal Rate of Return (IRR)

If you’re a first-time fund manager without prior fund metrics, you can establish credibility through:

• Angel investing: Building a personal investment portfolio with smaller checks, typically under $100K.
• Special Purpose Vehicles (SPVs): Pooling capital for single-company deals, giving your network access to investment opportunities.
• Warehousing investments: Making early investments before officially forming your fund, then transferring them into the fund after close.

2. Partner with the Right People

While it’s possible to launch a VC firm solo, partnering with someone whose skills complement your own strengthens credibility. For example, an operator with a COO background might team up with someone experienced in finance or technical expertise.

3. Choose the Right Structure

Most VC firms in Singapore establish a Private Limited Company (Pte. Ltd.) as their licensed management entity. The actual funds they manage are typically structured as Variable Capital Companies (VCCs), which provide flexibility in share issuance and redemption, as well as tax and regulatory advantages tailored for investment funds.

4. Fundraise and Form the Fund

Raising a VC fund involves pooling capital from external investors who become limited partners. This step is crucial in demonstrating your ability to attract backers who believe in your strategy.

5. Operationalize Your Fund

To run smoothly, your VC fund needs the right service providers. From fund administration and legal structuring to compliance support, outsourcing operational tasks ensures efficiency and investor confidence.

As PKF O’Connor Davies highlights, “A successful fund launch requires operational readiness, regulatory compliance and investor preparation. Taking the right steps early can set the foundation for long-term success.”

Final Thoughts

Singapore has become the preferred launchpad for venture funds in Asia, offering clarity of regulation, world-class infrastructure, and unparalleled tax incentives. For new and experienced managers alike, it provides a powerful ecosystem to scale globally.

Launch your fund with confidence. Book a call with us or get in touch with us at info@auptimate.com, and one of our experts will be more than happy to help you structure your fund for long-term success.