The New Singapore Variable Capital Company (VCC): An Overview for Fund Professionals

Singapore's Variable Capital Company Act and related subsidiary legislation came into force earlier this year. Introduced to encourage investment funds to be incorporated and operated in Singapore, the Variable Capital Company ("Singapore VCC") framework aims to enhance Singapore’s position as a fund domicile centre alongside other global fund domicile centres such as Luxembourg and the Cayman Islands. In addition to this core aim, the introduction of the Singapore VCC framework is also likely to bolster Singapore's already strong fund manager community, as well as its position, alongside Hong Kong, as one of the key centres in Asia for regional fund related financing transactions.

In this update, we provide an overview of some of the key features of a Singapore VCC, consider the tax treatment of a Singapore VCC and share some headline points for lenders and borrowers to consider in respect of the provision of financing to a Singapore VCC.