The grant scheme was first introduced by the Monetary Authority of Singapore (“MAS”) on January 15, 2020, and funded by the Financial Sector Development Fund (“FSDF”). The aim of the Singaporean Government was to make it easier to register a Variable Capital Company (“VCC”). This would provide a boost to the economy by covering funding up to 70% of expenses paid to Singapore-based service providers. The grant was capped at SGD$150,000 for each application with a maximum of three VCCs per fund manager.
MAS Grant extended for 2 more years
Following the success of the initiative, the VCCGS has now been extended to January 15, 2025. However, along with the extension, MAS has made several important rule changes to what is now the Extended Variable Capital Company Grant Scheme.
Under the Extended VCCGS the grant award cap has been reduced to SGD$30,000 per application. The percentage of coverage of the administrative and legal fees which it subsidizes has also been cut from the original 70% to 30%. Finally, the Extended VGCCGS is now only available to first time fund managers.
MAS Grant has seen increasing numbers of VCCs registered in Singapore
The MAS Grant has been a crucial incentive to attract fund managers to Singapore and to promote the adoption of the VCC structure. On the day the VCCGS began on January 15, 2020, 20 VCCs were launched.[1] Within the first four months over 50 VCCs had been launched,[2] and 100 were incorporated within seven months.
The VCC structure and the grant continued to enjoy success in the next two years, with 470 VCCs incorporated by the end of 2021, 600 by the end of Q3 2022, and shy of 800 VCCs by the beginning of 2023. Given this performance, it is unsurprising that the MAS has extended the scheme.
Private Equity and Venture Capital firms are the most common VCCs in Singapore
Although VCCs have proved to be a popular structure with many financial institutions across a broad range of funds, they have proved particularly attractive to private equity and venture capital funds. These two types of funds make up around one third of the VCCs in Singapore.
External asset managers were the next largest adopters of VCCs at 28%[3] followed by hedge funds (20%) and traditional funds (14%).[4]
How can we help you?
Apex Group has been helping businesses with the VCCGS since its first launch as a Pilot Programme. We have since expanded our service offering and client portfolio, supporting several dozen clients in the administration of their VCCs.
Our Singapore-based team of close to 150 professionals understand the market and can support the operation of VCCs and other fund structures from set-up, ongoing corporate management, and full-service fund administration.
To learn more about how Apex Group can help contact our team to discuss your requirements.
[1] https://www.worldfinance.com/contributors/view-from-singapore-one-year-of-the-vcc-structure
[2] https://www.worldfinance.com/contributors/view-from-singapore-one-year-of-the-vcc-structure
[3] https://www.asianinvestor.net/article/variable-capital-companies-vccs-in-singapore-increase-by-65/481964
[4] https://www.asianinvestor.net/article/variable-capital-companies-vccs-in-singapore-increase-by-65/481964
