Singapore fund structures


Singapore is a leading financial services hub strategically located in the heart of South East Asia and is highly regarded as being stable, transparent and a gateway to the Asia Pacific region. It also has a robust asset management ecosystem in place comprising of service providers such as banks, legal and tax advisors, and fund administrators. 

It is known for its open and well-regulated economy with pro-business policies having signed over 90 double taxation agreements, flat corporate income tax rate of 17% and has attractive tax incentive schemes for funds and asset managers such as the 13U and 13O schemes that provide for tax exemptions on certain income or gains derived by the funds. 

In 2020, Singapore introduced the Variable Capital Company (VCC) which is a flexible corporate legal entity applicable to both alternative and traditional investment funds across open-ended and close-ended strategies. 

Singapore is a popular jurisdiction for diversified asset classes including family offices, private equity venture capitals, fund of funds, real estate funds and hedge funds.

Explore Fund Structures: VCC | Limited Partnership | Private Limited Company


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Variable Capital Company (VCC)

Fund vehicle description

The Singapore VCC is a new corporate entity structure introduced in 2020 for collective investment schemes and is subject to the Variable Capital Companies Act 2018.

A VCC is governed by its board of directors accordingly to the terms of the VCC's constitution and must be managed by a fund manager that is licensed or regulated by the Monetary Authority of Singapore. Both the VCC's constitution and register of members are not available for public inspection.

Key considerations

Some benefits of setting up a Singapore VCC include:

  • Applicable for diversity in strategies. Domiciled in Singapore for a range of investment funds. Suitable for funds across traditional and alternative strategies (both open or closed-ended). 
  • Adaptable structure. Either stand-alone entities or umbrella structures with multiple sub-funds. If several funds are grouped within a single corporate entity, they are ring-fenced from each other. 
  • Cost savings. Greater investment flexibility, enhanced tax and operational efficiency and cost savings via economies of scale. 
  • Flexibility in set-up.  Fund managers can incorporate new VCCs and re-domicile existing funds with comparable structures in Singapore as a VCC.
  • Built-in confidentiality. As the accounts and share registry of VCCs aren’t made public, a degree of privacy comes as standard.

Tax implications

  • A VCC is treated as a company and a single entity for tax filing purposes, therefore only one set of income tax returns is required to be filed with the Inland Revenue Authority of Singapore
  • Income tax at the corporate tax rate of 17%
  • Each sub-fund is treated as a VCC, hence the chargeable income or exempt income of an umbrella VCC is the total of all its sub funds
  • Singapore has a single tier tax regime, and shareholder dividends paid out are not taxable

Click here to learn more about establishing a VCC in Singapore.

Limited Partnership

Fund vehicle description

The Singapore limited partnership was introduced in 2009 and is subject to the Limited Partnerships Act (Chapter 163B), the Partnership Act (Chapter 391) and the Limited Partnerships Regulations.

Private equity funds are typically constituted as limited partnerships comprising a general partner (GP) and limited partners (LP). 

Fund vehicle description

One of the key benefits of a limited partnership is that it is largely governed by the limited partnership agreement and therefore is free from legal constraints that are usually applicable to companies, especially in respect of any return of capital and distribution of profits.

Tax implications

  • An LP is tax transparent: the partners pay income tax on the profits made according to their share at the applicable tax rates
  • For companies, corporate tax is at 17%
  • For individuals, tax rates are progressive and range from 2% to 22%

Private Limited Company

Fund vehicle description

A private limited company incorporated in Singapore can be used to establish a fund and is subject to the Companies Act and are generally subject to strict accounting and auditing requirements.

A separate private limited company is typically
incorporated as a fund manager. This company enters into an investment management agreement with the fund, is paid management fees, and receives carried interest.

Key considerations

The primary advantages of setting up a Singapore private limited company include:

  • Limited shareholders’ liability. Liability for its debts and obligations lies with the company and the members are liable only to the extent of any amount unpaid on their shares.
  • Assets and real estate can be owned by the company for business purposes and the company is liable to pay property tax for these assets and not its owners.
  • Raising funds for the company expansion is easy and straightforward, whereby the owners can bring in a new shareholder or go to creditors for affordable loans.

Tax implications

  • Income tax at the corporate tax rate of 17%
  • Singapore has a single tier tax regime, and shareholder dividends paid out are not taxable

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