The Many Advantages of Variable Capital Company Singapore

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In 2020, Singapore introduced the Variable Capital Company investment structure. The aim was to get foreign investment and build Singapore as a robust global financial center. The VCC enables collective investment schemes to be organized under one corporate entity with categorized assets and liabilities. This development is poised to bring a range of options for fund and wealth managers. The Variable Capital company Singapore offers various benefits and is touted as a game changer in the fund management domain. Keep reading to understand the various benefits and uses of a Variable Capital company.


The Advantages of Variable Capital Company


VCC allows a lot of flexibility, which can be used creatively across various fund strategies, assets, and investor classes. Here are some key benefits of VCC.


  1. Lower Tax Compliance Pressure


With VCC, you benefit from a reduced tax compliance burden. A VCC only needs to file one corporate income tax return, irrespective of the total number of sub-funds it has.


  1. Managers Can Pool Investors as Per Their Objectives


A Variable Capital Company Singapore can adopt umbrella structures with several subfunds. They enjoy the legal segregation of assets and liabilities. Thus, the fund managers can pool investors as per their goals. They can assign monies across asset classes, most appropriately for every investor. This facilitates open-ended structures where reallocations can be managed to facilitate liquidity.


  1. Adoption of Various Strategies


A VCC fund administrator can adopt various strategies under a single roof. They can adopt closed or open-ended investment strategies for various sub-funds inside one VCC entity.


  1. Complete Confidentiality


There is no need for the registers of members of a particular VCC to be inspected by the public. This is in strict adherence to specific regulatory requirements. The financial statements of VCC cannot be made available publicly.


  1. More Flexibility


There are many flexibilities in various features of a VCC. This includes the need of just one shareholder, a single asset, and the flexibility to redeem capital at a price equivalent to its net asset value. It can also make distributions from assets rather than simply out of profits. This lends itself well to the usage of VCC as a master pooling tool for hassle-free returning capital and returns from investments to the investors.


  1. Asset Owners Can Easily Securitize And Unlock Value From Their Assets


An umbrella VCC offers the capacity to quickly add sub-funds. So the fund manager can provide a platform for the owners of the asset to securitize and gain value from their assets. They can do this by seeding their sub-fund and appointing a manager to handle the sub-fund for them. Thus, the VCC as a platform facilitates the fund manager to lease a sub-fund and give the needed fund management infrastructure to the asset owner.


Finals Thoughts


The adoption of Variable Capital Company Singapore has been a promising development for the fund industry. It provides fund managers and investors greater flexibility through features like the capacity to adopt an umbrella-sub-fund structure and easily diverse capital structure and availability across various fund strategies. The high flexibility in VCC enables it to be suitable for both conventional fund structures and creative ways. 
Location: Singapore

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