408
[ESTABLISHING A BUSINESS ENTITY IN SINGAPORE]
trusts that are not registered under the Business Trusts Act are governed by the general law of trusts and by the provisions in the Trustees Act 1967. The business trust is a not a separate legal entity and the trustees are the legal owners of the assets in the trusts. Trustee-manager Business trusts registered under the Business Trusts Act 2004 must have a trustee-manager. The trustee-manager must be a non-exempt company incorporated in Singapore with the sole business of managing and operating the trust. The trustee-manager has legal ownership of trust assets and holds them on behalf of the business trust and manages the trust assets for the benefit of the beneficiaries (called “unitholders”). (8) Variable Capital Company (VCC) Introduced in January 2020, the VCC is the newest legal vehicle to be introduced in Singapore through the Variable Capital Companies Act 2018. It is tailor-made for collective investment schemes (CIS). The take-up rate for VCCs has been very encouraging since its launch. A VCC: (1) has a variable capital structure that provides flexibility in the issuance and redemption of its shares. It can also pay dividends out of capital, which gives fund managers flexibility to meet dividend payment obligations;
structure their funds as umbrella VCCs, there may be cost efficiencies from using common service providers across the umbrella and its sub-funds; can be used for both open-ended and closed-end fund strategies; and must maintain a register of shareholders, which need not be made public. However, this register must be disclosed to public authorities upon request for regulatory, supervisory and law enforcement purposes.
(3)
(4)
Fund managers may incorporate new VCCs or re-domicile their existing overseas investment funds with comparable structures by transferring their registration to Singapore as VCCs. Permissible Fund Manager All VCCs must be managed by a Permissible Fund Manager. A Permissible Fund Manager refers to: (1) a licensed fund management company which holds a capital markets services licence for fund management; or (2) a registered fund management company; or (3) a financial institution exempted from holding a capital markets services licence to carry on fund management, for example, a bank, finance company or insurance company. The Permissible Fund Manager will have to provide a declaration that fulfils one of the above criteria and consents to act as the fund manager of the VCC. Director The VCC must have at least one director who meets the following requirements:-
(2)
can be set up as a single standalone fund or an umbrella fund with two or more sub-funds, each holding a portfolio of segregated assets and liabilities. For fund managers that
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator