Singapore has introduced a new investment guideline that is expected to usher in more foreign investment funds into the city-state and in the process, augmenting the destination’s status as a global fund management hub.
Christened as the Variable Corporate Companies (VCC), the latest framework will offer investors with more leeway in terms of operations and cutting down on costs.
Fund management firms are likely to incorporate new VCCs or move their present investment funds with similar frameworks by relocating their registration to Singapore as VCCs. This process can be facilitated by the Accounting and Corporate Regulatory Authority (ACRA) through its online application form.
Speaking to the Business Times on this new development, Tejas Desai, partner at EY India, said that the introduction of the VCC guideline is bound to further boost the already thriving fund management sector in Singapore.
The move is also likely to bolster fund management firms seeking to leverage Singapore as a key fund arena to lure investors from Europe and the United States, who have usually favoured locations such Luxembourg, Ireland or Cayman Islands to locate their funds.
Desai also predicted that in the near future, investment by Singaporean fund management firms into several Asian markets like India could probably take place via the VCC guideline.
In September last year, the Monetary Authority of Singapore (MAS) in collaboration with ACRA launched a trial scheme. As a continuation of that scheme, an initial bunch of 20 investment funds were either incorporated or re-domiciled as VCCs this week by a team of 18 fund management firms.
In a bid to urge industries to implement the VCC guideline in Singapore, the MAS has also started a VCC Grant Scheme that can support to bear the expenditure required for the incorporation or registration of a VCC by jointly sponsoring up to 70 percent of the entitled costs paid to service providers in Singapore.