A game-changing corporate structure has emerged in the Asia-Pacific fund landscape: the Singapore Variable Capital Company (VCC). Introduced under the Variable Capital Companies Act in January 2020, this forward-looking framework was designed to strengthen Singapore’s fund management ecosystem by offering a more flexible, tax-efficient investment vehicle tailored for professional investors.
If you’re new to the VCC structure or simply looking to understand its advantages, here are five compelling reasons why fund managers across the region choose to set up a Singapore VCC.
1. Greater Flexibility for Fund Structuring
The VCC framework unlocks a range of tax-efficient advantages. Whether set up as a standalone or umbrella fund, a VCC is treated as a single entity for tax purposes, simplifying administration and reducing compliance burdens.
Tax benefits include:
- Exemption of dividends/distributions from Singapore income tax in shareholders’ hands
- Eligibility for the 13O and 13U tax exemption schemes under the Singapore Income Tax Act
- Access to Singapore’s extensive Double Taxation Agreements (DTAs)
This makes Singapore VCCs an optimal structure for fund managers and global LPs seeking operational efficiency.
2. Improved Tax Efficiency
VCCs enjoy various beneficial tax treatments. For example:
- whether the VCC is structured as a non-umbrella or umbrella fund, the VCC will be recognized as a single entity when it comes to filing income tax returns;
- when distributions are made by a VCC in Singapore, distributions are generally tax exempt from Singapore income tax in the hands of its shareholders;
- as any company, the VCC itself is subject to income tax in Singapore. However, the tax exemption regimes governed under sections 13O (“Singapore Resident Fund Scheme”) and 13U (“Enhanced-Tier Fund Scheme”) of the Income Tax Act of Singapore are extended to VCCs.
3. Enhanced Investor Privacy
Privacy remains a top priority for many investors. With a VCC, while financial statements are submitted to the authorities, the identities of shareholders are not made public. This level of confidentiality is especially appealing to high-net-worth individuals, family offices, and institutional investors.
4. Regulatory Stability in a Pro-Business Jurisdiction
Singapore is known for its transparent legal environment, political stability, and pro-investment policies. These features provide fund managers with a trusted and secure jurisdiction to launch and scale their operations.
Benefits of Singapore as a domicile include:
- Robust financial infrastructure and regulatory clarity
- Recognition by global institutional investors
- Ease of doing business, supported by a highly skilled workforce
With the Monetary Authority of Singapore (MAS) support, the VCC enhances Singapore’s global asset management hub role.
5. Future-Proof Structure with Growth Potential
The VCC regime is still evolving, and this presents a tremendous opportunity. As fund managers, service providers, and regulators continue to embrace the framework, new structures, co-investment models, and cross-border distribution strategies are expected to emerge.
Early adopters are likely to benefit from:
- First-mover access to strategic partnerships
- Faster capital formation and deployment
- Operational scaling through multi-fund umbrellas
The VCC structure is poised to become the default fund vehicle in the region—ideal for forward-thinking investors and fund managers alike.
Seamlessly Launch Your VCC with Auptimate
At Auptimate, we help professional investors simplify how they structure and launch investment vehicles—starting with Singapore’s Variable Capital Companies. Whether you’re forming a single-strategy fund or building a multi-sub-fund umbrella, our platform streamlines, complies, and makes the entire process.
We provide:
- End-to-end support for VCC incorporation and structuring
- Digital onboarding with transparent pricing
- Access to expert fund administrators, legal partners, and tax advisors
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Get started with Auptimate and fully utilise the VCC framework, without the complexity.
