Singapore has become a leading base for hedge funds: a stable political and economic environment, a business-friendly regulator, and a fund-purpose-built corporate vehicle — the Variable Capital Company (VCC). A hedge fund can use the VCC to structure investor capital in a scalable, tax-efficient, and ring-fenced way, opening additional sub-funds as the strategy and investor base grow.
Why the VCC suits hedge funds
- Open-ended flexibility — shares are issued and redeemed in line with NAV, matching how hedge funds operate.
- Ring-fenced sub-funds — run multiple strategies under one umbrella, each legally segregated.
- Privacy — the register of members is not public.
- Tax incentives — qualifying income can be exempt under Section 13O or 13U.
The key players in a hedge fund VCC
| Role | Function |
|---|---|
| The VCC (umbrella + sub-funds) | The legal fund entity; unlimited ring-fenced sub-funds, each with its own strategy and investors |
| Singapore licensed fund manager | Manages the VCC under a MAS Capital Markets Services (CMS) licence — held directly, or accessed via an existing licensed manager |
| Fund service providers | Administration, accounting, audit, and legal services |
| Board & corporate secretary | Governance, shared across the umbrella |
Managers who do not hold their own licence can outsource the manager role to an existing licensed fund manager — we partner with MAS-licensed CMS fund managers to enable this for qualified clients.
Tax exemption: 13O vs 13U
| Section 13O | Section 13U | |
|---|---|---|
| Typical fit | Smaller onshore funds | Larger funds / institutional AUM |
| AUM | Lower threshold | Higher threshold |
| Investment professionals | Minimum headcount | Higher minimum headcount |
| Fund domicile | Onshore | Onshore and offshore |
Both require genuine economic substance in Singapore. Confirm current thresholds with MAS and IRAS. See our detailed 13O vs 13U comparison.
Setup steps and timeline
- Appoint a Singapore-regulated fund manager (or launch under an existing one).
- Incorporate the VCC with ACRA and appoint board, secretary, and auditor.
- Open the umbrella and your first ring-fenced sub-fund.
- Submit for 13O / 13U tax incentive where eligible.
A straightforward hedge fund VCC can typically be incorporated within weeks; tax-incentive approval depends on MAS review. Use the VCC cost calculator for an indicative estimate, and read the VCC structure guide for the full picture.
Start a hedge fund VCC
Tell us about your strategy and investor base. We connect qualified managers with a MAS-licensed CMS partner in Singapore.
Frequently asked questions
Why use a VCC for a hedge fund?
A VCC lets a hedge fund issue and redeem shares in line with net asset value, run multiple strategies as ring-fenced sub-funds under one umbrella, and access Singapore's 13O/13U tax incentives — all within an onshore, regulated structure.
Do I need my own licence to run a hedge fund VCC?
The VCC must be managed by a Singapore-regulated fund manager. Many hedge fund managers launch under an existing MAS-licensed CMS fund manager rather than applying for their own licence first, which is the fastest route to market.