The Variable Capital Companies is one of the initiatives the Singapore government has undertaken to expand the city-state’s fund management sector and accomplish its goal of becoming the asset management opportunities’ gateway in the Asia Pacific region.
The VCC structure offers an opportunity for funds that Singapore-based fund managers handle to be domiciled in the country. Here is what you need to know about establishing a VCC in Singapore.
What is the Singapore Variable Capital Company?
The Variable Capital Company is a corporate structure wherein the issuance and redemption of the company shares can be done with ease and flexibility. VCC’s capital will be equal to its net assets all the time, thereby allowing distribution flexibility. Moreover, the VCC can pay dividends from the capital, thereby allowing flexibility for fund managers in fulfilling dividend payment duties.
A VCC structure can run either as a stand-alone or as an umbrella organisation with several sub-funds which are collected under one corporate entity and still stay separated. It is a new alternative to limited partnerships, unit trusts, limited liability partnerships, and companies. Business owners can also use it for conventional and alternative fund strategies.
What are the advantages of VCCs over private limited companies?
The following are some benefits of a Variable Capital Company over private limited companies:
A VCC can change its capital without the approval of its investors, allowing the investors the right to freely invest, withdraw, or redeem their capital from the company. Such a transaction can be done daily.
The public cannot access VCC’s returns and constitution. However, it must be filed with the Registrar of VCCs.
A VCC’s register of members will not be accessible to the public. The ones who may access the register are the fund manager, some public authorities, a custodian or an individual permitted by a court order. The shareholders, however, can get information relating to themselves.
A VCC can be set up under an umbrella fund.
How to set up a VCC?
Here are the
necessary steps to register a Variable Capital Company in Singapore:
1. Registering a new name for the VCC: Business owners have to pick a unique name which identifies their business and make others easy to find it. To complete this step, they must submit the relevant application with the VCC name and information of director and VCC officers, which include their ID number, nationality, address and in-principle approval from other authorities, if applicable. The application typically takes up to fourteen days to process. Business owners will receive the approved name application’s transaction number.
2. Apply for the VCC registration: Business owners have to submit several documents when registering a VCC, including the approved name application’s transaction number, information of the VCC officers, registered office address, proposed working hours, copy of the constitution, and information of the Permissible Fund Manager and subscribers. Business owners have to pay a non-refundable fee of SGD 8,000 for a VCC incorporation.
3. Get a Business Profile: Business owners will obtain the entity’s Business Profile for free after it has been successfully registered, which includes the UEN issue to the VCC. The UEN will be the identification number of the business entity which will be needed when transacting with government firms.
Sub-Funds Registration For An Umbrella VCC
Even though a sub-fund is not recognised as a separate legal entity, business owners intending to set up an umbrella structure must register every sub-funds with ACRA via a special form. To complete the registration, they need to submit the following details:
Name and the UEN of an umbrella VCC
The sub-funds proposed name
The sub-funds date of establishment
Business owners have to pay a non-refundable filing fee of SGD 400 for the registration of each sub-fund. The registration may take up to fourteen days to process and may be referred to the Monetary Authority of Singapore. Business owners may be asked to change sub-funds proposed name.
Getting Help From Singapore Incorporation Services Provider
Reputable company incorporation in Singapore helps streamline the process of company registration in Singapore. Some service providers also offer helpful services, including accounting, payroll, audit, and assurance services. When choosing a company incorporation firm, entrepreneurs should consider its location, reputation, industry expertise, services, and pricing model.
You may also, want to read 7 Essential Steps to Set Up An E-Commerce Business in Singapore.
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