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PDegal LLC offers clients an extensive range of services to private equity and venture capital firms, family offices, providing advice and expertise on:

  • establishment and licensing of fund management companies and fund regulatory matters
  • establishment of family offices and variable capital companies (VCC) funds
  • structuring and establishment of offshore and onshore, private investment funds
  • offering of funds-related services
  • legal and regulatory requirements for fintech, digital assets and payment services
  • corporate advisory and guidance on fundraising, including the venture investment model agreements (VIMA)

The Variable Capital Company – a corporate structure for investment funds in Singapore

On 15 January 2020, the Monetary Authority of Singapore (MAS) launched the much awaited ‘Variable Capital Company’ (VCC), a new corporate structure customized to cater to the specific requirements of investment funds.

The VCC structure is based on the “Segregated Portfolio Company” structure – a company, which remains a single legal entity and may create segregated portfolios such that the assets and liabilities of each portfolio are legally separate from the assets and liabilities of any other portfolio, currently adopted by jurisdictions such as the Cayman Islands. Much like the Segregated Portfolio Company, the VCC can be structured as a stand-alone fund or an umbrella fund with multiple sub-funds.

This article seeks to provide an overview of the VCC structure including regulatory requirements and incentives, and highlight why the VCC is becoming an increasingly popular vehicle for fund and wealth management.

Key Features of the VCC

The following are the key features of a VCC:

  • The VCC can be structured as a single stand-alone fund or an umbrella VCC with multiple sub-funds.
  • Whether structured as a stand-alone fund or as an umbrella fund, the VCC and its sub-funds are considered a single legal entity.
  • When structured as an umbrella VCC, each sub-fund operates as a “cell” with distinct assets and liabilities, thereby allowing for ring-fencing of assets from other sub-funds within the umbrella VCC.
  • The VCC may be constituted as an open ended (i.e mutual and hedge funds) or closed end (i.e. venture and private equity funds) fund.
  • The VCC benefits from flexibility in relation to dividend payouts which can be paid out of its capital. This is in contrast to the traditional structure under the Companies Act, where dividends may only be paid out of profits.

Advantages of the VCC

As the VCC was introduced for the purposes of fund and wealth management, it has been ultimately tailored towards the needs of the aforesaid industries. Some of the key advantages of the VCC include the following:

  • Privacy and Confidentiality – The register of members and the Constitution (which embodies rights of investors, nuances of distributions etc.) of the VCC is publicly available information, providing necessary privacy and confidentiality to Investors and Fund/Wealth Managers alike.
  • Tangible cost efficiencies – When structured as an Umbrella VCC, sub-funds will benefit from streamlined operations viz. a common fund manager, team and board of directors, and common service providers i.e. custodian, counsel, auditor fund administrator etc. This would ultimately reduce significant statutory, regulatory cost and ongoing operational expenses.
  • Sub-Funds may adopt separate strategies as the VCC allows for versatile structures with ability to build in varied investor rights.
  • The VCC will benefit from tax incentives which will be granted at the umbrella level and cover all Sub-Funds (streamlined administration, decrease expenses etc.)

Grant Scheme

To encourage industry-wide adoption of the VCC framework from managers in Singapore and globally, the MAS has announced a generous grant to defray VCC related set up costs (the “Grants Scheme”).

Under the Grants Scheme, MAS will reimburse VCCs up to S$150,000 which can be utilized towards payments to eligible Singapore based service providers (legal and tax counsel, regulatory & compliance).

Tax Treatment and Incentives

For the purposes of tax, the VCC is treated as a company and a single entity. As such, the VCC need only to file a single Income Tax return with the Inland Revenue Authority of Singapore (IRAS) .

The VCC will also be able to be afforded tax benefits such as:

  • Tax Exemptions on qualifying investment income under the Tax Incentive Schemes (13R,13X, 13R).
  • Tax Exemption Scheme for New Start-Up Companies is also available to the VCC.
  • Eligibility for the ‘check- the-box’ election which makes it tax efficient for US investors.

Meet the Team

A diverse and dynamic group of industry-leading lawyers committed to helping you solve your challenges.

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Meet the Team

A diverse and dynamic group of industry-leading lawyers committed to helping you solve your challenges.

Find out more

Recent cases and news

Get the latest insights and learn more about the cases we’re working on.

Find out more

Recognised as one of Singapore’s Best Law Firms, 2021

PDLegal LLC has been recognised as a recommended firm in The Straits Times’ survey on Singapore’s Best Law Firms for 2021 under the Maritime & Shipping practice category.

The Straits Times, together with international market researcher Statista, conducted the first-ever survey to identify Singapore’s best law firms in 15 different areas of legal practice.

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Meet the Team

A diverse and dynamic group of industry-leading lawyers committed to helping you solve your challenges.

View All
  • Peter Doraisamy

    Managing Partner

    Raghunath Peter Doraisamy is the Managing Partner of PDLegal LLC. Peter specialises in shipping and maritime law and complex litigation.

  • Gerard Quek

    Deputy Managing Partner

    Gerard’s main areas of practice include fraud and asset recovery, commercial disputes, financial services law and regulation and shipping litigation.

  • Nazim Khan

    Senior Partner

    Nazim specialises in complex high value Commercial Litigation and International Arbitration.

  • Andrew Lee Weiming

    Partner

    In October 2017, Andrew was featured as one of “Asia’s brightest young legal minds under 40 years of age making waves” by Asian Legal Business.

  • Ling Wei Hong

    Partner

    Wei Hong is a dispute resolution specialist. His practice areas are Construction and Insurance.

  • Mike Chiam

    Partner

    Mike’s main areas of practice include Commercial and Corporate Advisory (Mergers & Acquisitions, Fundraising, VCCs), Financial Services Regulatory (Private Equity/Venture Capital Funds, Private Equity and Fintech), and Technology and Digital Business Services.

  • Mato Kotwani

    Partner

    Mato’s practice areas encompass civil and commercial litigation, criminal litigation (white-collar and general crime), employment law and other advisory work

  • Kyle Gabriel Peters

    Partner

    Gabriel is a litigator and dispute resolution lawyer. Gabriel’s main area of practice is commercial and corporate litigation with an emphasis on insolvency and restructuring, fraud and investigations, and international arbitration. 

  • Lakshman Shankar

    Partner, Head - India Desk

    Lakshman is an Indian-qualified lawyer registered as a foreign lawyer in Singapore. He has 24 years of experience and leads the firm’s India desk. 

  • Cathryn Neo

    Partner

    Cathryn is a triple-qualified (Singapore, England & Wales, and Australia (Vic)) dispute resolution specialist. Cathryn has a broad commercial disputes practice with experience in international arbitration, insolvency and restructuring, and mediation.

  • Daniel Ling

    Counsel

    Daniel’s areas of practice include fraud and asset recovery, commercial disputes, and white-collar investigations.

  • Tay Jing En

    Associate

    Jing En is a dispute resolution lawyer. His practice areas include civil and commercial disputes, criminal law and family law.

  • Kashib Shareef Ahmad

    Associate

    Kashib graduated from the National University of Singapore in 2020 with a Bachelor of Laws, Second Class Honours (Upper).

  • Sathya Narayanan

    Associate

    Sathya’s main areas of practice are civil and commercial litigation, restructuring and insolvency, and international arbitration.

  • Vincent Lee

    Associate

    Vincent specialises in disputes including contentious employment matters, insolvency as well as civil/commercial litigation.

  • Kanjanisa (Chloe) Jansiri

    Registered Foreign Associate (Thailand desk)

    Registered Foreign Associate (Thailand desk) l Barrister-at-Law, Thai Bar association and Attorney-at-Law (Lifetime Member), Lawyers Council of Thailand.

  • Glenn Chua

    Associate

    Glenn’s main area of practice is complex commercial disputes, restructuring and insolvency, international arbitration, and mediation. Glenn also assists in the conduct of criminal defence, particularly in relation to white-collar crimes.

  • Yzabel Dumaguing

    Associate

    Yzabel’s main areas of practice are complex commercial and civil litigation (including cross-border commercial and corporate disputes), fraud investigations, energy, natural resources & mining, offshore, international trade, and insolvency and restructuring.

  • Cheng Wai Yee

    Associate

    Wai Yee specialises in: Commercial and Corporate Advisory (Mergers & Acquisitions, Fundraising), and Investment Funds  (Private Equity, Venture Capital, VCCs)

  • Laurence Corray

    Manager - Insurance Practice

    Laurence has dedicated his professional career to claims handling and underwriting within the sphere of Marine Insurance. He has been a significant change accelerator within Singapore Underwriting circles

Let's Get In Touch

Our Office

  • A:

    PDLegal LLC Advocates & Solicitors 1 Coleman Street #08-02 The Adelphi Singapore 179803

  • E:

    enquiry@pdlegal.com.sg

  • T:

    (65) 6220 0325

  • F:

    (65) 6220 0392

  • H:

    Mon - Fri : 9:00 am - 5:00 pm
    Sat : 8:30 am - 12:00 pm

We’re here to help you

We know what’s at stake, and our lawyers ready for you – if you would like to speak to us for more information, please contact our client services team who will be happy to assist.

    For faster response, Call Us!

    (65) 6220 0325

    For faster response, Call Us!

    (65) 6220 0325

    Let's Get In Touch

    Our Office

    • A:

      PDLegal LLC Advocates & Solicitors 1 Coleman Street #08-02 The Adelphi Singapore 179803

    • E:

      enquiry@pdlegal.com.sg

    • T:

      (65) 6220 0325

    • F:

      (65) 6220 0392

    • H:

      Mon - Fri : 9:00 am - 5:00 pm
      Sat : 8:30 am - 12:00 pm