Understanding the Singapore Variable Capital Company (VCC)

The Variable Capital Company (VCC) is a corporate entity structure in Singapore under which multiple funds or collective investment schemes (whether open-end or closed-end) may be gathered under the umbrella of a single corporate entity and yet remain ring-fenced from each other. 

The VCC structure was introduced by the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA) in January 2020 to encourage more investment funds to be domiciled in Singapore.

For fund managers, asset managers, private equity firms, and institutional investors, the VCC fund structure presents a game-changing opportunity to efficiently set up and manage multiple investment strategies under a single legal entity.

Since its launch, over 1,000 VCCs have been registered in Singapore as of 2024, solidifying its position as Asia’s premier fund domicile.

How Does a VCC Fund Structure Work?

A VCC fund structure allows fund managers to create a flexible investment structure under a single legal entity. There are two main types of VCCs:

Standalone VCC

• Functions as a single fund with one investment strategy.
• Ideal for small to mid-sized funds with focused investment objectives.

Umbrella VCC (Multi-Fund Structure)

• Houses multiple sub-funds under a single legal entity.
• Each sub-fund is segregated, meaning assets & liabilities remain separate.
• Popular among private equity, hedge funds, and multi-strategy funds.

Why Choose an Umbrella VCC?

• Cost Efficiency – Only one VCC registration is needed, reducing costs.
• Segregated Assets – Each sub-fund operates independently.
• Easier Fund Expansion – Managers can launch new investment strategies without setting up a new entity.

Many fund managers in Singapore opt for the umbrella VCC to maximize operational efficiency and streamline multi-strategy fund management.

Singapore VCC Requirements: Who Can Set Up a VCC?

To set up a VCC in Singapore, fund managers must meet certain regulatory requirements as below.

Eligibility Requirements

• Must be managed by a licensed or registered fund manager (regulated by MAS).
• Can be used for open-end or closed-end investment strategies.
• Can be set up as a retail or restricted (private) fund.

Regulatory Oversight

• Governed by the Variable Capital Companies Act (VCC Act).
• Regulated by MAS & ACRA.
• Compliance with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) regulations.

Setting Up a VCC in Singapore

Below is the standard process of setting up a VCC in Singapore by the Accounting and Corporate Regulatory Authority.

• Registering a VCC name
• Determining the VCC type
• Appointing Directors, Company Secretary and Other Key Persons
• Registered Office Address and Constitution
• Incorporating a new VCC
• Registration of Sub-fund(s) for an Umbrella VCC
• VCC Filing Fees

For detailed information, please refer to the Accounting and Corporate Regulatory Authority official guide to set up a VCC in Singapore. 

Why Fund Managers Choose Singapore’s VCC Structure

Singapore has positioned itself as Asia’s top fund domicile due to its strong regulatory environment, tax incentives, and investor protections.

Key Advantages of a Singapore VCC

• Flexibility: Capital can be redeemed without shareholder approvals.
• Tax Benefits: Eligible VCCs enjoy tax exemptions on fund gains.
• Investor Privacy: Shareholder records are confidential (unlike private limited companies).
• Seamless Re-Domiciliation: Existing funds from Cayman, Luxembourg, or BVI can be re-domiciled to Singapore as a VCC.
• Regulatory Clarity: MAS oversight ensures compliance & investor protection.

With these benefits, it’s no surprise that Singapore’s VCC structure is attracting global hedge funds, venture capital firms, and family offices.

Tokenization of the VCC Structure

One of the most exciting developments in the Singapore VCC ecosystem is the rise of blockchain-powered VCC funds.

For the VCC structure to meet the future needs of investment managers, investors, and service providers and compete sustainably with similar legal structures in other popular fund jurisdictions such as Cayman and BVI, it needs to enable tokenization capability to offer more operational benefits to the VCC fund’s stakeholders. 

Tokenization of fund interests not only allows fund managers to access a new distribution channel powered by distributed ledger technology (DLT) that offers tradability of private market assets but also offers increased efficiencies and cost savings for lifecycle management of parent fund and sub-funds.

Tokenizing a VCC fund allows fund managers to:

• Enable fractional ownership for global investors.
• Improve liquidity through secondary market trading.
• Reduce operational inefficiencies with on-chain fund management.

InvestaX Led the First Tokenization of a VCC

InvestaX collaborated with UBS, StateStreet, CMS, PwC and the Tezos Foundation in Singapore to launch the first e-VCC. The objective of the e-VCC Project was to determine the benefits and challenges for fund managers in using an e-VCC structure as well as offer potential solutions to the identified challenges. 

Some of the key findings of the e-VCC project are:

• Blockchain-native fund share (token) can bring efficiencies and benefits to the fund management industry, such as reduction of intermediaries and fixed costs, removal of redundant processes, increased transparency, and faster settlement
• Tokenization of a VCC is applicable at both umbrella VCC level and sub-fund VCC levels
• The newly established VCC legislation is structured in a way that could enable blockchain-native token issuance and facilitate secondary market trading of these on digital securities exchanges such as InvestaX
• Some of the functions of fund administrators and corporate secretaries could be digitalized and streamlined under the adoption of e-VCC. That said, both stakeholders are playing key roles in managing the daily operations of the e-VCCs

More information on Project e-VCC can be found here and its report is available here.

Tokenize your first VCC with InvestaX

InvestaX is the leading Real World Asset Tokenization SaaS Platform in Asia. InvestaX is licensed by the Monetary Authority of Singapore (MAS) and holds a Capital Markets Services (CMS) Licence and Recognized Market Operator (RMO) License for the issuance and trading of RWAs for global investors.

Get in touch with us for further information on how to tokenize a VCC.

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