Setting Up a Private Equity Funds In Singapore


SCALABLE, FLEXIBLE, TAILORED FOR FUNDS

Private Equity Fund

Singapore has become a popular destination for private equity firms due to its stable political and economic climate, business-friendly environment, and favourable regulatory framework. Private Equity firms can use the VCC to structure their clients assets in a scalable and tax efficient way as the VCC can easily open multiple sub-funds as their clients’ needs grow. Setting up a fund structure in Singapore gives access to the influx of wealth, a multitude of established financial institutions and a strategic positioning in Asia.

Private Equity Fund
VCC Overview

Key players

① Private Equity Firm

With the VCC, private equity firms can set up a fund that is tailored to their investors needs and objectives, while enjoying a streamlined regulatory framework and tax benefits. Under a single umbrella, they can create an unrestricted number of sub-funds catered to different strategies and audiences. VCC also guarantees privacy as investor information is not made public.

② Singapore Licensed Fund Manager

Private equity firms can apply for a Singapore fund license but would need full-time investment professionals in Singapore. Alternatively, it can outsource this role to an existing licensed fund manager in Singapore for easier access.

③ Fund Service Providers

The service providers that provide the operational services for the fund. These include accounting, auditing, legal, and administrative services.

④ VCC Umbrella Fund

Sub-funds can be tailored for a variety of structures and purpose as there are no restrictions on where and what the VCC can invest to. Each sub-fund can have its own advisor, allowing performance benchmarking between various strategies and advisors. The VCC can also be used to feed into existing funds setup in other jurisdictions.

Key Players of the VCC - Directors, Fund Managers, Service Providers and the VCC Fund

Tax Exemption Requirements

For license-managed VCCs

13O Resident Tax Exemption

13U Enhanced-Tier Tax Exemption

Tax residency

Fund must be tax resident of Singapore

Fund can be constituted in Singapore or overseas

Fund manager requirements

Requires a Singapore-based CMS licensed fund manager

Requires a Singapore-based CMS licensed fund manager with 3 investment professionals

AUM

No restrictions

Minimum fund size of SGD 50 million

Fund reporting requirement

Min. SGD 200,000 annual expenses

Min. SGD 200,000 annual local business spending

Fund administration requirement

Annual statements to investors. Tax filing to IRAS for non-qualifying investors.

None needed

Fund administration requirement

Requires a Singapore fund administrator

Other reporting requirements

Annual MAS declaration & annual tax returns to IRAS

13O Resident Tax Exemption

Fund must be tax resident of Singapore

Requires a Singapore-based CMS licensed fund manager and fund administrator

No minimum AUM

Min. SGD 200,000 annual expenses

Annual MAS declaration & annual tax returns to IRAS

13U Enhanced-Tier Tax Exemption

Fund can be constituted in Singapore or overseas

Requires a Singapore-based CMS licensed fund manager with 3 investment professionals & a fund administrator

Minimum fund size of SGD 50 million

Min. SGD 200,000 annual local business spending

Annual MAS declaration & annual tax returns to IRAS

Setup Steps & Timeline

Singaporean Efficiency

ProcessEstimated Time
1) Engage a fund manager as the central coordinator for your fund
2) Confirm the fund structure’s term sheet such as the investment period, fund life, management fee, carry, valuation frequency, investment targets and fund size, etc.
3) Select a legal counsel, fund administrator, corporate secretary and auditor
3) Draft legal documents such as company constitution, private placement memorandum, management, subscription and redemption agreements, etc.3-4 weeks
4) Register and Incorporate the VCC with the MAS4-6 weeks
5) Apply for the 13O/U tax exemption4-6 weeks
6) Start onboarding the investors
7) Create additional sub-funds for different investors and strategies

Benefits of the VCC
For Private Equity Firms

Scalable &
Segregated

Under a single umbrella, unlimited sub-funds can be opened that would have no bearing on other funds.

Flexibility of
Strategies

Funds can have a variety of strategies and different sub-fund advisors across global private equity markets.

Umbrella
Efficiency

The VCC tax exemption is assessed on an umbrella level, allowing each sub-fund contributes to the requirements.

Access
Singapore

Investing in Singapore gives the assurance their assets are well-safeguarded by strong regulations and access to the influx of wealth in Singapore.

A New Frontier

Get connected with our service partner providers to inquire how you may start your private equity fund and access Singapore — the preeminent financial hub of Asia
[email protected]

Start a Private Equity VCC

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