For a single family office fund claiming the Section 13O incentive, both a Singapore private limited company and a Variable Capital Company (VCC) can be the fund vehicle, because MAS accepts approved funds that are companies incorporated and resident in Singapore. The private company is usually simpler: your own family office can manage it under the MAS licensing exemption, it may qualify for audit exemption, and it is cheaper to run. A VCC gives you a private register of members and ring-fenced sub-funds, but it must have a manager permitted under the VCC Act, a statutory auditor and an outsourced AML/CFT provider. The manager question often decides the matter.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
This guide is for families, their advisers and family office principals choosing the legal form of the fund entity before applying to MAS.
Why does the vehicle choice matter so much?
A typical Singapore single family office (SFO) structure has two entities. The family office company employs the investment professionals and manages the money. The fund vehicle holds the investments and is the entity that applies to the Monetary Authority of Singapore (MAS) for the Section 13O or Section 13U tax exemption. Our guide to setting up a family office under Section 13O or 13U explains the full structure and the scheme conditions.
This article deals with one decision inside that structure: whether the fund vehicle should be an ordinary private limited company under the Companies Act 1967 or a VCC under the Variable Capital Companies Act 2018. The choice affects who may manage the fund, which MAS conditions apply, what is visible to the public, how much the fund costs to run and how easily the family can separate different pools of assets later.
The vehicle does not create the tax exemption. The exemption comes from the MAS award and from meeting the scheme conditions every year. A VCC is not “more tax-efficient” than a private company simply because it is a VCC.
Which vehicles can apply for Section 13O and Section 13U?
MAS’s circular on the tax incentive schemes for funds (FDD Cir 05/2026, dated 31 July 2026) describes Section 13O as available to approved funds that are companies incorporated and resident in Singapore. A Singapore private limited company fits that description, and so does a Singapore VCC, which is a body corporate. Section 13U is wider and covers approved standalone fund vehicles or approved structures (such as master-feeder structures) without the Singapore incorporation limit.
MAS administers both schemes, and its page on fund tax schemes for family offices links to the current circular. For SFO funds whose awards are approved on or after 1 August 2026, the circular sets the main entry conditions:
| Condition (SFO funds) | Section 13O | Section 13U |
|---|---|---|
| Fund vehicle | Company incorporated and resident in Singapore (private company or VCC) | Approved fund vehicle or structure, Singapore or foreign |
| Minimum AUM in designated investments | S$20 million at application and at the end of each basis period | S$50 million at application and at the end of each basis period |
| Qualifying investment professionals employed by the SFO | At least 2, including 1 non-family member (1 allowed at application, with the second hired by the end of the first basis period) | At least 3, including 1 non-family member (2 allowed at application) |
| Minimum local spending | Tiered by AUM: S$200,000 below S$250 million, S$500,000 up to S$2 billion, S$1 million at S$2 billion and above | |
These conditions apply whichever vehicle you choose. What the investments can be is covered separately in our note on designated investments a family office fund can hold.
Who can manage the fund? The question that often decides it
MAS defines an “SFO fund” as a fund vehicle holding assets primarily from members of one family and managed by an SFO that is exempt from licensing under paragraph 5(1)(ba) of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations. That exemption took effect on 15 June 2026, with existing SFOs given until 15 June 2027 to comply, as our article on the SFO class exemption transition deadline explains.
Private limited company. Nothing in company law restricts who manages its investments. Your exempt SFO can sign an investment management agreement with the fund company, and the fund sits naturally on MAS’s SFO track.
VCC. Section 46 of the Variable Capital Companies Act 2018 requires a VCC to have, at all times, a manager that is either a holder of a capital markets services licence for fund management, a bank, merchant bank, finance company or insurer covered by section 99(1)(a) to (d) of the Securities and Futures Act 2001, or a person within a class prescribed by regulations. A VCC cannot be its own manager.
An SFO relying on the family office exemption is not a licence holder and is not a bank or insurer. It can act as a VCC manager only if it falls within a class prescribed for this purpose. Historically, family offices could not manage a VCC directly, and many families appointed a licensed fund manager instead. Confirm the current position with MAS or a Singapore fund lawyer before you commit to the VCC route.
This matters for the tax award. If a licensed external manager runs the VCC, the fund is not an SFO fund in MAS’s terms. MAS’s non-SFO track is designed for funds with capital from third-party investors, or a genuine intention to raise it, and MAS may revoke an award where that intention is not borne out. A purely family-funded VCC managed by a licensed manager should be discussed with the manager and MAS before you apply.
How do the two vehicles compare in practice?
| Point | Private limited company | VCC |
|---|---|---|
| Governing law | Companies Act 1967 | Variable Capital Companies Act 2018, restricted to collective investment schemes |
| Fund manager | Exempt SFO can manage it | Must be a manager permitted under section 46 |
| Register of members | Shareholders appear on ACRA records available to the public | Not shared with the public; available to the manager, members (for their own entries), public authorities and court-ordered inspection |
| Financial statements | Filed with ACRA and available for purchase, unless the company is a solvent exempt private company | Prepared and audited for members; check with your adviser what accompanies the annual return |
| Audit | Small company audit exemption may apply; MAS accepts certified accounts from audit-exempt 13O companies | Must appoint an auditor every year |
| Segregated pools | One pool; separate pools need separate companies | Umbrella VCC can hold several sub-funds with legally segregated assets and liabilities |
| Capital changes | Share buy-backs and capital reductions follow Companies Act procedures | Shares can be issued and redeemed at net asset value as a fund operation |
| AML/CFT | Bank due diligence on the SFO and fund; fund must keep a MAS-licensed bank account | Must also engage an eligible financial institution to perform AML/CFT duties under MAS Notice VCC-N01 |
| Set-up and running cost | Lower ACRA fees and lighter compliance | Higher ACRA registration fee, a fee per sub-fund, plus manager, audit, AML/CFT and often fund administration costs |
Confidentiality
Privacy is the reason most families ask about a VCC. Under section 82 of the VCC Act, the register of members is open only to specified persons such as the manager, public authorities, members in respect of their own holdings and persons with a court order. ACRA confirms that a VCC does not need to share its member list with the public. A private limited company’s shareholders, by contrast, can be seen by anyone who buys its business profile.
The gap is narrower than it sounds. A private fund company can be held through a holding company or trust, and banks, MAS and IRAS see the beneficial owners under either vehicle.
Audit and accounts
A VCC has no route to audit exemption, so budget for an audit every year. A family fund company may qualify for the small company audit exemption, and MAS’s circular expressly accepts certified financial statements from audit-exempt Singapore companies under Section 13O when computing the fund’s profit. Many families still choose an audit because their bank or the family’s governance rules expect one.
Sub-funds and future flexibility
An umbrella VCC lets a family keep, for example, a liquid portfolio and a private equity pool in separate sub-funds, each with its own assets and liabilities. MAS treats an umbrella fund as one legal entity for the award, so economic conditions such as local spending are assessed across all the sub-funds together. A private company achieves separation only by forming more companies, each with its own filings.
Which vehicle suits which family?
A private limited company usually suits a family that:
- wants its own SFO to manage the fund under the MAS licensing exemption;
- has one investment pool and no plans for separate strategies or classes;
- wants to keep running costs and compliance to the minimum; and
- is comfortable holding the fund through a holding company or trust for privacy.
A VCC usually suits a family that:
- has, or will appoint, a manager that qualifies under section 46 and has worked out which MAS track the fund falls under;
- needs several ring-fenced pools, for different branches of the family or different strategies;
- values a member register closed to the public; and
- is prepared for the audit, AML/CFT and administration costs.
If you are still deciding whether a VCC fits your plans at all, our explainer on what a VCC is and who it suits covers the vehicle itself.
How to decide, step by step
- Decide who will manage the money. Your own exempt SFO, or a licensed external manager. This step determines whether a VCC is available and which MAS track applies.
- Confirm the scheme. Check AUM in designated investments, investment professional headcount and local spending against the Section 13O and 13U conditions.
- Map the pools. List the portfolios the family wants to keep apart, now and over the next ten years.
- Decide how much privacy you need, and from whom. Compare a VCC register with a private company held through a holding company or trust.
- Cost both options. Include audit, AML/CFT provider, fund administration, company secretary, tax filing and MAS reporting.
- Incorporate, then apply. Incorporate the SFO and the fund vehicle, open the MAS-licensed bank accounts, file the SFO notification with MAS within 14 days of starting operations and submit the incentive application.
Documents to prepare
- Family tree and source of wealth evidence for the beneficial owners
- Structure chart showing the SFO, the fund vehicle and any holding company or trust
- Investment management agreement between the manager and the fund
- Draft constitution of the fund company or VCC
- CVs and employment terms of the investment professionals
- Business plan with local spending and capital deployment projections
- For a VCC: manager’s licence or exemption basis, auditor engagement and AML/CFT provider appointment
A worked example
Example (hypothetical): A family has S$45 million of listed securities and bonds and plans to employ two investment professionals in Singapore, one of whom is not a family member. The parents want one pool. Their children, who live in different countries, may later want separate pools.
The family first confirms that its new SFO will operate under the MAS licensing exemption and manage the money itself. Unless the SFO can lawfully be a VCC manager, a VCC would need a licensed external manager, which would move the fund off the SFO track. The family therefore incorporates a private limited company as the fund vehicle, holds it through a family holding company, and applies under Section 13O, which its AUM supports. It records in its governance notes that if separate pools for the children become necessary, it will revisit a VCC once the manager question has been confirmed with MAS.
Frequently asked questions
Is a VCC required for Section 13O?
No. Section 13O is available to approved funds that are companies incorporated and resident in Singapore. A private limited company qualifies, as does a VCC.
Can our single family office manage a VCC?
Only if it falls within a category permitted by section 46 of the VCC Act. An SFO relying on the family office licensing exemption is not a licence holder, so confirm the current position with MAS or a fund lawyer before choosing a VCC.
Does a VCC pay less tax than a private company?
Not by itself. Both are taxed as companies, and the exemption comes from the MAS award. An umbrella VCC’s sub-funds are treated separately for tax, which can help with administration but does not reduce tax on its own.
Will the public see who owns the fund?
For a VCC, the register of members is not open to the public. For a private company, the shareholders are on ACRA’s records, although they may be a holding company or trustee rather than individual family members.
Need help choosing a family office fund vehicle?
Raffles Corporate Services can incorporate the family office and fund company or VCC, act as company secretary, maintain the registers, prepare the accounts and tax filings, and help assemble the documents for the MAS incentive application. Contact us at [email protected] or on WhatsApp at +65 8501 7133. Licensing questions about who may manage a VCC can be referred to advisers from our associated law firms. This article is general information, not tax or legal advice.
Kevin Yeo, Raffles Corporate Services