The MAS VCC Grant presents a unique opportunity for Singapore businesses to leverage the benefits of the Variable Capital Companies (VCC) framework, designed to enhance the flexibility and attractiveness of fund management in Singapore. This innovative scheme, launched by the Monetary Authority of Singapore (MAS), aims to support companies in establishing and operating VCCs by providing financial grants to offset initial costs. In this article, we look into the key features of the MAS VCC Grant, including eligibility criteria for applicants, funding details, and the required operational period. Additionally, we will offer practical tips on setting up a VCC to help businesses navigate this promising avenue for growth and investment.
What does this scheme entail?
The VCC Grant Scheme acts as a powerful driver of growth and innovation within the Variable Capital Company (VCC) sector in Singapore. Its primary objective is to enhance the competitiveness of VCCs by providing valuable financial assistance and incentives. This scheme enables companies to access funding for a wide range of activities, such as research and development, technological adoption, market expansion, and talent development, thus fostering their overall growth and sustainability.
Designed to support the establishment and expansion of VCCs, the VCC Grant Scheme is available to companies registered under the Variable Capital Companies Act. The grant covers a portion of the eligible expenses incurred during the setup of a VCC, with the amount awarded being determined by the nature and scale of the proposed activities. As an ongoing initiative, applicants are encouraged to stay informed about specific submission deadlines and review cycles to ensure they make the most of the available support and resources.
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What does the applicant and grant eligibility look like?
To be eligible for the Extended VCC Grant Scheme (VCCGS), applicants must be first-time Qualifying Fund Managers who have not previously incorporated or re-domiciled a VCC or applied for the VCCGS. The grant is available only to those who have incorporated a Variable Capital Company (VCC) or successfully re-domiciled a foreign entity to Singapore as a VCC between January 16, 2023, and January 15, 2025, and have received a Notice of Incorporation or Notice of Transfer of Registration from ACRA.
The grant cannot be used alongside other government incentives for the same costs and commitments. Each applicant is limited to one VCC per application, and all qualifying expenses must be paid to Singapore-based service providers for work done in Singapore. Although the grant covers costs for sub-fund registrations, it must be part of the overall VCC setup rather than claimed independently for sub-fund registration alone.
Applications should be submitted within three months from the date on the Notice of Incorporation (for new VCCs) or within three months of ACRA’s approval of de-registration (for re-domiciled entities).
What is the funding you can expect?
Eligible for a co-funding of up to 30% of qualifying expenses, capped at S$30,000 per Variable Capital Company (VCC), this support covers a range of essential services. This includes legal services, which can help with various aspects of corporate law and compliance; tax services to manage and optimize tax obligations; and administration or regulatory compliance services that ensure adherence to all necessary regulations and administrative requirements. This initiative aims to alleviate some of the financial burdens associated with these crucial business functions, providing significant support to VCCs.
What are the operational period requirements?
A Variable Capital Company (VCC) that has been awarded a grant under the Extended VCC Grant Scheme (VCCGS) is required to remain operational for a minimum period of one year from its Registration Date. This stipulation means that the VCC must not be wound up within the first year following the Registration Date. Should the VCC be wound up during this initial one-year period, the Qualifying Fund Manager is obligated to promptly inform the Monetary Authority of Singapore (MAS). This notification must be made no later than one week from the date of the application for winding up or the passing of a resolution for a voluntary winding up.
In such cases, MAS is able to pull back the grant that was awarded to the VCC if it is dissolved within the first year from the date of registration. Furthermore, the MAS may enforce this right if the recipient fails to notify the MAS of the winding up within the required one-week timeframe. It is crucial for the Qualifying Fund Manager to adhere to these requirements to avoid potential financial repercussions and ensure compliance with grant conditions.
Pro tips to successfully establishing a VCC
Being mindful of the objectives
The VCC Grant Scheme aims to position Singapore as the leading fund domicile by encouraging the establishment of Variable Capital Companies (VCCs). This initiative enhances Singapore’s asset management reputation, promotes innovation, and fosters healthy competition among diverse VCCs. By inspiring businesses to elevate their services, the scheme enriches investor options and supports continuous growth, paving the way for a dynamic and prosperous future for all stakeholders.
Meeting the eligibility criteria
To fully grasp the VCC Grant Scheme, it is crucial to understand its eligibility criteria. Meeting these requirements requires meticulous attention and a commitment to professionalism.
Perks that spur development
The VCC Grant Scheme offers fund managers financial support and access to a prominent network within Singapore’s financial ecosystem. This network includes industry leaders, regulatory bodies, and seasoned professionals who provide guidance and collaboration opportunities. By participating in the scheme, fund managers gain not only funding but also entry into a supportive community that fosters growth and knowledge exchange.
Straightforward application process
For newly formed VCCs, the grant application process can be straightforward. First-Time Qualifying Fund Managers must track all qualifying incidental costs, such as legal, tax, administration, or added regulatory compliance expenses, often incurred during incorporation. These records must be submitted to the Monetary Authority of Singapore within the first three months of incorporation.
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Frequently Asked Questions
1. What is the MAS VCC Grant, and what does it support?
The MAS VCC Grant provides financial assistance to companies establishing and operating Variable Capital Companies (VCCs) in Singapore. It covers up to 30% of qualifying expenses, capped at S$30,000 per VCC, for services like legal, tax, and regulatory compliance.
2. Who is eligible to apply for the MAS VCC Grant?
The grant is available to first-time Qualifying Fund Managers who have incorporated or re-domiciled a VCC in Singapore between January 16, 2023, and January 15, 2025. The grant cannot be used with other government incentives for the same costs, and applications must be submitted within three months of the Notice of Incorporation or de-registration.
3. What are the operational requirements for a VCC receiving the grant?
A VCC awarded the grant must remain operational for at least one year from its Registration Date. If the VCC is wound up within this period, the Qualifying Fund Manager must inform the Monetary Authority of Singapore (MAS) within one week. Failure to comply may result in the grant being clawed back.
4. What should applicants keep in mind when applying for the MAS VCC Grant?
Applicants should ensure they meet all eligibility criteria and track all qualifying expenses. They should apply within three months of incorporation, use Singapore-based service providers, and understand that the grant covers setup costs rather than sub-fund registrations alone.
