Understanding Variable Capital Companies (VCC)

Understanding Variable Capital Companies

The variable capital company in Singapore or VCC is a recently established corporate investment fund structure designed to complete the existing structures in Singapore. It was launched on 14 January 2020 and is constituted under the Variable Capital Companies Act. In this article, we take a deeper look at VCCs, how they work, and how you can set one up in Singapore. Read the guide about Understanding Variable Capital Companies below in detail.

Key Features of a VCC

ACRA – the Accounting & Corporate Regulatory Authority of Singapore – is responsible for administering the VCC Act in the country. Per the set guidelines, a VCC should be managed by a Permissible Fund Manager. Other features that identify this structure include:

  • VCCs can be established as single standalone or umbrella funds with multiple sub-funds.
  • VCCs have a variable capital structure, allowing more flexibility in shares issuance.
  • A fund manager can incorporate a new VCC or re-domicile an existing overseas fund by transferring its registration to Singapore as a VCC.
  • VCCs can be implemented in closed and open-ended fund strategies.
  • A VCCs must prepare and file a shareholders register that must be presented to public authorities when requested but need not be made public.

Company Incorporation in Singapore

ACRA, which also sets the rules for company incorporation in Singapore, requires that all companies be registered under Singapore’s Companies Act. To register a private limited company, you must meet the following requirements:

  • A locally registered physical address
  • $1 in paid-up capital
  • At least one shareholder
  • One company secretary
  • Once resident director

For incorporation, every non-resident shareholder must produce a bank reference letter, a copy of their passport, and residential proof address. Resident shareholders will need a copy of their ID or passport. This is unless the shareholder is a corporate entity, in which case, the requirements will include:

· Proof of registered address

· Documentation on parent company directors

· A copy of the certificate of incorporation for the parent company

Setting Up a Company in Indonesia

If you are looking to set up a company in Indonesia, you first have to decide the type of legal entity you would like to establish. The legal options include:

1. Local Company (PT): Most common Indonesian legal entity. Intended for local citizens but can be established by a foreign party under a local nominee arrangement.

2. Representative Office (RO): Usually considered a local branch of a foreign parent company and often comes before PT PMA establishment.

3. Foreign-Owned Company (PT PMA): Can be fully owned by foreign entrepreneurs, although the maximum ownership will depend on the type of business and its activities.

Hong Kong Company Formation

Hong Kong is a hub for entrepreneurs thanks to perks like a free trade policy. Generally, the key steps in the Hong Kong company formation process are:

v Step 1: Determining the company type and name.

v Step 2: Incorporating the company

v Step 3: Registering the company with the Inland Revenue Department in Hong Kong, specifically the Business Registration Office.

Registration must be done within one month of starting the new business.

Company Incorporation Services in Singapore

Whether you are a local or foreign investor, you will need to enlist company incorporation services in Singapore from a knowledgeable company registration specialist. Such help may include managing pre and post-incorporation requirements such as:

· Payroll management

· Meeting annual ACRA filing requirements

· Accounting and bookkeeping

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Incorporation Requirements for VCCs in Singapore

To incorporate a VCC in Singapore, the Net Asset Value (NAV and share capital must be equal. You should also get approval for the company name – which must carry the suffix VCC – before you begin incorporation. Other requirements include:

· Appointing at least one resident director (non-authorized scheme) or three directors (authorized scheme), a Singapore-based auditor, company secretary, and shareholder.

· An S$8,000 registration fee, payable to ACRA, or S$400 for a Sub-Fund.

· A constitution

· A Singapore-registered office

· An appointed MAS-licensed fund management company (FMC), unless you are exempted.

Additionally, at least one of the VCC’s directors must be a registered director or rep of the FMC. You must also appoint at least one shareholder.

Conclusion

Variable Capital Company in Singapore is going a long way in elevating the country’s wealth and asset management industry. The introduction of the VCC act has made Singapore an even more enviable and attractive funds hub. Because it is regulated by a dedicated legal framework, you can use it for both traditional and alternative investment funds as either an open or close-ended strategy.

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By Michael Caine

Michael Caine is the Owner of Amir Articles and also the founder of ANO Digital (Most Powerful Online Content Creator Company), from the USA, studied MBA in 2012, love to play games and write content in different categories.

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