The Variable Capital Company (VCC) is a new corporate entity structure under which several collective investment schemes (whether open-end or closed-end) may be gathered under the umbrella of a single corporate entity and yet remain ring-fenced from each other.
It is similar to the open-ended investment company structure in the UK and protected cell company or segregated portfolio company structures in jurisdictions like Guernsey or the Cayman Islands.
The new corporate entity structure will give funds an alternative to the existing structures available in Singapore, namely, unit trusts, limited partnerships, limited liability partnerships and companies.
The VCC will be regulated under its own legislation, the Variable Capital Companies Act 2018, which was passed on 1 October 2018 but is not yet in force. The new structure will likely only be available some time in the last quarter of 2019.
In this publication, we explain the key features of the VCC, the legal framework relating to the incorporation and establishment of a VCC, and set out a comparison of the VCC structure against existing fund structures in Singapore.