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Singapore extends grant scheme for Variable Capital Companies

Extension will co-fund 30% of qualifying expenses incurred by Singapore-based service providers for work related to the incorporation or registration of a VCC

The Monetary Authority of Singapore (MAS) has announced an extension to its grant program aimed at reducing the costs associated with setting up or registering a Variable Capital Company (VCC) in Singapore. The grant program, originally set to end on January 15, 2023, has been extended until January 15, 2025, in response to high market demand.

Under the extended program, the Financial Sector Development Fund will provide co-funding for 30% of qualifying expenses incurred by Singapore-based service providers for work related to the incorporation or registration of a VCC, with a maximum reimbursement of SGD30,000 per application.

The Extended VCCGS is open to first-time Qualifying Fund Managers who have not previously established a VCC, re-domiciled a foreign corporate entity as a VCC, or applied for the grant.

Singapore is a global centre for fund management and in recent years, the government has implemented various measures to strengthen Singapore’s global competitiveness in the fund management sector and position the country for future economic growth.

One of these measures is the VCC, jointly introduced in 2020 by the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA). The VCC framework, which is a corporate structure specifically designed for investment funds, has gained wide acceptance among international investment managers. It enables the creation of standalone funds or umbrella entities with multiple sub-funds, each with distinct investment goals, assets, liabilities, and investors.

Since its introduction, the VCC has been embraced by foreign investors and many VCCs have been established. According to the Business Times, the number of family offices in Singapore surged fivefold from 2017 to 2019 and nearly doubled from 400 at the end of 2020 to 700 a year later.

The launch of the VCC was accompanied by a grant scheme that provided funding for Singapore-based asset managers and family offices to cover qualifying expenses, such as legal, administrative, tax, and compliance costs. The grant was initially set to expire on January 13, 2023. However, due to the high demand, the VCC Grant Scheme (VCCGS) was extended for an additional two years, until January 15, 2025, now known as the Extended VCCGS.

Under the extended program, the Financial Sector Development Fund (FSDF) will co-fund 30% of qualifying expenses incurred by Singapore-based service providers for work related to the incorporation or registration of a VCC, with a maximum reimbursement of SGD 30,000 per application. This is a change from the original VCCGS, which provided funding of 70% of expenses, capped at SGD 150,000 for each application, with a maximum of three VCCs per fund manager.

The Extended VCCGS is open to first-time Qualifying Fund Managers who have not previously established a VCC, re-domiciled a foreign corporate entity as a VCC, or applied for the VCCGS. In addition, first-time applicants must have obtained a Notice of Incorporation or a Notice of Transfer of Registration from ACRA between January 16, 2023 and January 15, 2025.

For more information on setting up a Variable Capital Company, contact Alpadis Group.