VCC – The Framework

Modern office building facade

What a typical VCC looks like

Singapore currently offers a variety of investment fund forms. These are found as limited partnerships, unit trusts, business trusts, and real estate investment trusts. Corporations are also used as investment subsidiaries for “fund” investments. The addition of the Variable Capital Company (VCC) in this suite of legal entities, which can be used as a vehicle for investment funds, is key to elevating Singapore’s value proposition as a competitive asset management hub in the region.

The VCC is a new corporate structure for investment funds constituted under the Variable Capital Companies Act which took effect on 14 Jan 2020. The VCC Act and subsidiary legislation is administered by ACRA. The anti-money laundering and countering the financing of terrorism obligations of VCCs will come under the purview of the Monetary Authority of Singapore (MAS). 

Key features of a VCC


  • A VCC has a variable capital structure that provides flexibility in the issuance and redemption of its shares. It can also pay dividends out of capital, which gives fund managers flexibility to meet dividend payment obligations.
  • VCCs can hold a single asset and as such, is not required to diversify its investments unless required under the SFA.
  • The share capital of a VCC will always be equal the net asset value of the VCC.
  • The performance of the VCC’s investments shall be measured and evaluated on a fair value basis.


  • A VCC can be set up as a single standalone fund or an umbrella fund with two or more sub-funds, each holding a portfolio of segregated assets and liabilities.
  • The umbrella VCC would have provisions for the segregation of assets and liabilities between sub-funds, such that the assets of one sub-fund may not be used to satisfy the liabilities of another sub-fund.
  • To address the key risk of cross-cell contagion within a VCC, any provisions (e.g. in the constitution or in agreements entered into by VCCs) which are inconsistent with the segregation of assets and liabilities of sub-funds, would be void. To ensure that third parties dealing with VCCs are aware of segregated assets and liabilities of sub-funds, a VCC will be required to disclose – in documents in which its sub-fund is referred to and in dealings with third parties prior to entering into oral agreements on behalf of its sub-fund – the name, unique sub-fund identification number and that the sub-fund has segregated assets and liabilities.
  • The sub-fund is subject to the orders of the court as if it had been a separate legal person.
  • A VCC may sue or be sued in respect of a particular sub-fund and may exercise the same rights of set-off in relation to that sub-fund as it may apply for company incorporation under the Singapore Companies Act.
  • VCCs with multiple sub-funds must have the same fund manager for all the sub-funds under the umbrella fund.
  • Further, the winding up of the individual sub-funds does not automatically initiate the winding up of the entire umbrella fund.
  • A sub-fund of a VCC may invest in other sub-funds of the same VCC.


  • Fund managers may incorporate new VCCs or re-domicile their existing overseas investment funds with comparable structures by transferring their registration to Singapore as VCCs.


  • VCCs must be managed by a fund management company duly registered or licenced by the MAS unless exempted
  • VCCs must maintain a register of shareholders, which need not be made public. However, this register must be disclosed to public authorities upon request for regulatory, supervisory and law enforcement purposes. 
  • Financial statements of any VCC are not publicly available but a VCC is subjected to an annual audit by a Singapore public accountant
  • A VCC must have a qualified company secretary and registered office in Singapore

AML/CFT requirements

  • AML/CFT requirements on VCCs are supervised by the MAS for AML/CFT compliance
  • VCCs are required to outsource the performance of AML/CFT duties to its fund manager, who are held ultimately responsible for compliance with its AML/ CFT requirements
  • VCC’s directors are subjected to fit and proper checks, and the VCC is required to have at least one director who is also a director of its fund manager