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Requirements

Incorporation requirements

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  • A minimum of one member is required for incorporation of a VCC

  • The VCC must have a permissible fund manager (see below)

  • The VCC must fulfil the director requirements (see below)

  • The constitution of the VCC, along with the prescribed forms, must be lodged with ACRA

  • The cost of the name reservation application of a VCC is S$15, the cost of incorporating a VCC is S$8,000 and the cost of registration of a sub-fund is S$400

 

Director requirements

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  • The VCC must have at least one director who is a qualified representative or director of the fund manager

  • The VCC must have one director who is ordinarily resident in Singapore

  • Directors of a VCC have to be fit and proper persons in accordance with the prescribed regulations

 

Fund Manager requirements

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  • The VCC must be managed by an entity that is licensed by the Monetary Authority of Singapore (“MAS”) under a capital markets services licence for fund management, a registered fund management company, or a financial institution exempted under s99(1)(a)-(d) of the Securities and Futures Act (Cap. 289) (“Permissible Fund Manager”)

  • This includes funds managers operating under the venture capital fund manager regime

  • It does not include single family offices or real estate fund managers relying on the immovable property exemption. Such persons can choose to be licensed or regulated by MAS and incorporate a VCC thereafter

Custodian requirements

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  • The fund manager of a VCC has the duty to ensure the assets of the VCC are held by a custodian

  • However, where a VCC only makes private equity or venture capital investments, a custodian will not have to be appointed if (i) the interests in the fund are offered only to accredited and/or institutional investors; (ii) the fund manager has disclosed the fact that the assets are not maintained in a trust/custody account with a specified custodian to the investors; (iii) the fund manager has obtained investors’ acknowledgement of this arrangement; and (iv) the fund manager has arranged for an auditor to audit the assets on an annual basis and furnish a report on the audit to the investors.

  • Retails funds have additional requirements with respect to custodians.

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AML/CFT requirements

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  • Under the MAS Notice VCC N-01, AML/CFT obligations are imposed on VCCs

  • VCCs are required to outsource the performance of its AML/CFT obligations to an eligible financial institution (prescribed entities supervised by MAS for AML/CFT purposes)

  • The eligible financial institution may then outsource the functions to service providers which may or may not be regulated by MAS (such as a fund administrator)

  • However, the VCC remains ultimately responsible for its AML/CFT obligations

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Audit and accounting requirements

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  • VCCs must appoint an accounting entity to audit their accounts on an annual basis. An audit committee will not be required

  • VCCs are allowed to prepare its financial statements in accordance with SFRS, IFRS and US GAAP

  • However, financial statements of the VCC must contain separate accounts for each sub-fund, with a single accounting standard used across all sub-funds of the VCC

  • Audited financial statements of a VCC must be laid before members at the annual general meeting of the VCC– as such, investors in one sub-fund will have access to financial information of another sub-fund of the VCC

 

Download the chart below for information on other fund structures in Singapore (i.e. Limited Partnerships and Private Limited Companies) 

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