Singapore Fund Structures

  • Singapore Fund Structures

    • LIMITED PARTNERSHIPS
    • VARIABLE CAPITAL COMPANIES
    • PRIVATE LIMITED COMPANIES
    • UNIT TRUSTS

    • Fund Structures Covering All Investors

      Investor type Schemes constituted in Singapore Schemes constituted outside of Singapore
      Offered to retail investors Authorised schemes Recognised schemes
      Offered to accredited investors Restricted authorised schemes Restricted recognised schemes
      Offered to institutional investors

    • Singapore Asset Manager Regime and Investment Fund Types

      Mutual fund Hedge fund Private equity Real Estate fund (Private) VCFM REIT ETF
      Fund manager CMS Licence (retail) CMS licence (A/I)/RFMC CMS licence (A/I)/RFMC CMS licence (A/I). Exemption also available if managing immovable assets only/ RFMC CMS licence (VCFM) REIT Manager CMS Licence (retail)
      Fund type Authorised Restricted (or if offered to Institutional investors/ private placement, then exempt) Restricted (or if offered to Institutional investors/ private placement, then exempt) Restricted (or if offered to Institutional investors/ private placement, then exempt) Restricted (or if offered to Institutional investors/ private placement, then exempt) Authorised Authorised
      Legal entity Unit Trusts or VCC Limited Partnerships/ Unit Trusts/ Company/ VCC Limited Partnerships/ Unit Trusts/ Company/ VCC Limited Partnerships/ Unit Trusts/ Company/ VCC Limited Partnerships/ Unit Trusts/ Company/ VCC Typically Unit Trusts Unit Trusts or VCC
      Compliance to Code of Collective Investment Schemes Yes No No No No Yes Yes
      Custodian requirement Yes Yes No No No Held by Trustees Yes
      Local administrator Yes (through tax incentive schemes)
      1. The Singapore limited partnership was introduced in 2009 and is subject to the Limited Partnerships Act (Chapter 163B), the Partnership Act (Chapter 391) and the Limited Partnerships Regulations.
      2. A Singapore limited partnership does not have separate legal personality and is governed by a limited partnership agreement on the terms agreed between the partners. Neither the limited partnership agreement nor (where the limited partnership is established primarily as an investment fund and either the general partner or the manager is a fund manager licensed (or exempt from license) in Singapore) the list of partners are available for public inspection. For further information on fund manager licenses (and exemption from license) in Singapore, please refer to the Establishing a Fund Management company in Singapore page.
      3. A limited partnership must consist of at least one "general partner" and at least one "limited partner". A general partner is responsible for the management of a limited partnership and is liable for all debts and obligations of a limited partnership. An investor participates in a limited partnership as a limited partner, with their liability in respect of such limited partnership limited to the amount of such limited partner's agreed contribution to the limited partnership. In order to retain limited liability status, a limited partner must not take part in the management of a limited partnership. The Limited Partnership Act includes a non-exhaustive "white list" of actions a limited partner may take, without being regarded as taking part in the management of a limited partnership.
      4. There is no limit on the number of partners that may comprise a limited partnership.
      5. For further information on the requirements and process regarding registration of a Singapore limited partnership, please refer to the Accounting and Corporate Regulatory Authority's How to Guide: Registering a Limited Partnership.
      1. The Singapore variable capital company (the "VCC") was launched in 2020 as a tailored corporate vehicle for collective investment schemes and is subject to the Variable Capital Companies Act 2018 (No. 44 of 2018).
      2. A VCC is a body corporate with separate legal personality and is governed by its board of directors in accordance with the terms of the VCC's constitution. A VCC must be managed by a fund manager that is licensed or regulated by the Monetary Authority of Singapore (for further information on fund manager licensing and regulation requirements in Singapore, please refer to the Establishing a Fund Management company in Singapore page). Neither a VCC's constitution nor register of members is available for public inspection.
      3. An investor participates in a VCC as a member, with such member's liability in respect of the VCC limited to the amount (if any) unpaid on their shares in the VCC.
      4. A VCC may be established as either a standalone fund vehicle or as an umbrella fund with one or more sub-funds, each of which must have segregated assets and liabilities from the other sub-funds in the same umbrella VCC (but such sub-funds do not have separate legal personality).
      5. A VCC may issue and redeem shares without shareholder approval and may pay dividends out of both capital and profit.
      6. For further information on the requirements and processes relating to incorporation of a Singapore VCC, please refer to the Accounting and Corporate Regulatory Authority's How to Guide: Setting Up a VCC.

      Key Highlights of the Variable Capital Company

      • A legal entity specifically for investment funds that can be used for traditional and alternative strategies,both on an open-ended and closed-ended basis.

      • A VCC can be set up as a standalone entity, or as an umbrella entity with multiple sub-funds.

      • Foreign corporate fund structures can be inward re-domiciled to Singapore as a VCC.

      • The capital of a VCC will always be equal to its net assets, thereby providing flexibility in the distribution and reduction of capital.

      • VCCs require a Singapore-based licenced or regulated fund manager, unless exempted under the regulations.

      • A VCC can avail itself of the US “check-the-box” election.

      1. The Singapore private limited company is subject to the Companies Act (Chapter 50).
      2. A private limited company is a body corporate with separate legal personality, governed by its board of directors in accordance with its constitution.
      3. An investor participates in a private limited company as a member, with the liability of such member limited to the amount (if any) unpaid on their shares in the private limited company. The register of members of a private limited company is available for public inspection. A private limited company must send a copy of its constitution to any member on request.
      4. A private limited company may only pay dividends out of profits (not capital). A return of capital may be achieved through a capital reduction, a share buyback or redemption of redeemable preference shares (however, various requirements and restrictions apply to any such capital reduction exercises).
      5. For further information on the requirements and process regarding incorporation of a Singapore private limited company, please refer to the Accounting and Corporate Regulatory Authority's How to Guide: Setting Up a Local Company.
      1. The Singapore unit trust is subject to the Trustees Act (Chapter 337).
      2. A Singapore unit trust does not have separate legal personality and is governed by the manager (overseen by the trustee) in accordance with the terms of the trust deed entered into between the trustee and the manager. The assets of a unit trust are held by the trustee, which is liable for the debts and obligations of the unit trust. The trust deed and the register of unitholders are typically not made available to the public. 
      3. A unit trust may be established as either a standalone fund or as an umbrella fund with one or more sub-funds, each of which may have segregated assets and liabilities from the other sub-funds in the umbrella.
      4. The terms in relation to the issue or redemption of units in a unit trust and the distribution of capital or income to unitholders are governed by the trust deed of the unit trust.

  • Offering Collective Investment Schemes in Singapore

    A "collective investment scheme" is an arrangement in respect of any property where: (a) the participants do not have day-to-day control of the management of the property; (b)(i) the property is managed as a whole by or on behalf of the manager; and/or (ii) contributions of the participants and profits/income from which payments will be made to participants are pooled; and (c) the purported purpose or effect of the arrangement is to enable the participants to participate in or receive profits/income arising from the relevant property.

    If a collective investment scheme is offered to investors in Singapore it will be regulated under the Securities and Futures Act (Chapter 289) of Singapore and, subject to certain exemptions (discussed below): (a) the collective investment scheme must be either authorised (if constituted in Singapore) or recognised (if constituted outside Singapore) by MAS; and (b) the offer of units in the collective investment scheme must be made in, or accompanied by, a MAS-registered prospectus and product highlights sheet. The collective investment scheme, its manager and trustee/custodian must also comply with MAS Code on Collective Investment Schemes.

    • Authorisation and Recognition

      A collective investment scheme established in Singapore may apply for authorisation (using Form 1 on OPERA) if, among others, the manager holds a capital markets services licence for fund management and there is a trustee approved under section 289 of the Securities and Futures Act that acts as the trustee for the scheme (where the scheme is a unit trust) or is appointed as its custodian (where the scheme is a variable capital company or a sub-fund of an umbrella variable capital company). (For further information on licences and approvals please refer to the Establishment in Singapore page). A collective investment scheme established outside Singapore may apply for recognition (using Form 2 on OPERA) if, among others: (a) the laws and practices of the jurisdiction in which the collective investment scheme is constituted affords investors in Singapore equivalent protection to that provided by authorised Singaporean schemes; (b) the manager is licensed or regulated in its principal place of business and is a fit and proper person; and (c) a Singapore representative is appointed.

    • Offers of Collective Investment Schemes Made in Reliance on an Exemption

      The offer of units in a collective investment scheme will be exempt from the authorisation/recognition and prospectus requirements if the offer is made in reliance on an exemption. Some of the more common exemptions are as follows:  

      1. a.  the offer is targeted at "institutional investors" only. (For further information on institutional investors, please refer to the Establishment in Singapore page);
      2. b.  the collective investment scheme is a "restricted scheme" that is offered to inter alia "accredited investors". (For further information on accredited investors and institutional investors, please refer to the Establishment in Singapore page);
      3. c.  the offer is made via private placement to no more than 50 persons within any period of 12 months (i.e. the "Private Placement Exemption"); or
      4. d.  the total amount raised within any period of 12 months does not exceed SGD 5 million (i.e. the "Small Offer Exemption").

      The above exemptions are subject to compliance with various conditions (e.g., no advertising and specific investor disclosures), which are set out in Subdivision 4 of Division 2, Part XIII of the Securities and Futures Act and the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations. In the case of restricted schemes, a prior notification of the offer of the restricted scheme must be made to the MAS, and annual filings must be made for the restricted scheme at each anniversary of the initial filing of the notification for the restricted scheme (if units in the scheme will continue to be offered to persons in Singapore after the relevant anniversary date). 

    For further information and guidance on offering collective investment schemes in Singapore, please to the MAS guide to Offers of Collective Investment Schemes