The VCC Advantage

What is a VCC?

  • The Variable Capital Company (VCC) is a new corporate structure for investment funds in Singapore, constituted under the Variable Capital Companies Act 2018 (Act 44 of 2018).
  • A VCC fund can be constituted as a standalone fund or as an umbrella fund.
  • A VCC fund is regulated by the Monetary Authority of Singapore (MAS).

Advantages of Silverdale Fund VCC

  • The benefits of having both the fund manager: Silverdale Capital Pte Ltd and the fund: Silverdale Fund VCC (as Singapore Restricted Schemes), under the oversight of Monetary Authority of Singapore (MAS), a gold standard amongst regulators in Asia and one of the most respected regulators in the world.
  • The assets & liabilities of each sub-Fund of Silverdale Fund VCC are legally segregated. This ensures ring-fencing of assets and liabilities between various sub-funds; thus, avoiding cross-contamination risks associated with traditional multi-class funds. Each sub-fund of a VCC may be wound up independent of each other.
  • Significant cost efficiencies for the investors working with us, rather than creating their own standalone fund structures, including the requirement of minimum resources commitment (inter alia: S$ 200,000 of expenditure per annum), the adjunct costs, and the expertise.
  • Since Silverdale Fund VCC is registered under section 13U of Income Tax Act of Singapore, the income and gains derived from investments made by Silverdale Fund VCC are exempt from income-tax.
  • Investors of Silverdale Fund VCC benefit from the Double Taxation Avoidance treaties (DTAT) signed by Singapore with over 80 countries; these treaty benefits are not available to trust structures.
  • Unlike a Singapore corporate entity, Silverdale Fund VCC does not require a court approval for reduction of share capital. Hence, its shares can be redeemed without any prior approval. Further, Silverdale Fund VCC can also pay dividends using its capital, in contrast to a company which generally can pay dividends only out of profits. These all could provide tax efficiency and match timing differences.
  • All offshore jurisdictions are coming under increasing scrutiny from regulators which are demanding economic substance in the offshore domiciles, creating incalculable business risks: tax risks, ESG (governance) risks, and operational risks of working through nominee personnel. These foreign corporate entities can be re-domiciled / transitioned into on-shore Silverdale Fund VCC, Singapore.
  • Since Silverdale Fund VCC is a Singapore-based on-shore fund managed by Silverdale Capital Pte Ltd, a MAS authorised fund manager, the remittance from and to the fund is relatively easier.
  • Unlike a Singapore company, the register of members of Silverdale Fund VCC is not publicly accessible, thus providing confidentiality to its investors.
  • Silverdale Fund VCC can make an election under the US "check the box" rules to be treated as a "pass-through" entity for US federal tax purposes, enabling US investors to invest in it.
  • Silverdale Fund VCC has no restrictions on investment strategy or asset class.
  • A sub-fund under Silverdale Fund VCC can be set up as either an open ended or a closed ended fund structure.

For further details of Silverdale Fund VCC, please contact us.