In a move aimed at attracting more global funds to set up their legal entities in Singapore, the Monetary Authority of Singapore (MAS) has proposed introducing a corporate structure for investments. This is expected to play to Singapore’s regulatory strength amid stronger global pressures for tax transparency, which effectively calls for businesses to be domiciled in jurisdictions where they have substantive operations. In announcing the proposed change, Singapore’s Second Minister for Finance Lawrence Wong said this move will enable investment managers to consolidate their operations in Singapore by domiciling more of their funds in the republic, alongside their fund management activities. “We believe this will spur demand for fund-servicing activities such as accountancy, legal, custody and tax in Singapore, therefore creating more jobs in the broader professional services sector,” said Mr Wong, who is also minister for national development.
Under the new corporate structure known as the Singapore Variable Capital Company (S-VACC), asset managers domiciled in Singapore can enjoy more flexibility and save on costs, said Mr Wong. The structure can be applied to open-ended and close-ended funds, retail and private funds, and for investments across all asset classes. Open-ended funds differ from close-ended ones in that open-ended funds can adjust constantly their investment criteria, their capital and their fund size. Asset managers will also be able consolidate administrative functions at an umbrella fund level. This means sub-funds with varying risk levels, investment objectives and classes of investors can be housed together under the same legal entity, said Mr Wong.
Source: Business Times