|Fund Structure||Singapore Limited Partnership|
|Cost||S$115 for 1-year registration|
S$175 for 3-year registration
S$30 for a renewal fee
S$60 for amendments
Formation can become costly depending on the law firm or tax advisor engaged
There is a S$1,000 non-refundable application fee and S$4,000 annual corporate fee for a Venture Capital Fund Manager license
|Timing||Entity registration can be completed in 1 day, but it can take up to 2 months in unusual circumstances if the application requires additional governmental review|
|Fund Marketing||Register the fund offering with MAS|
|Tax Treatment||One-tier corporate tax system so once corporate income tax is paid by a Singaporean tax-resident company, shareholders are not taxed on dividends|
No capital gains tax devised the disposal of capital investments
Gains from the disposal of ordinary share are tax exempt if certain standards are met
|Singapore Venture Capital & Private Equity Association||https://www.svca.org.sg/|
Singapore is a leading global domicile for venture capital funds. In 2019, Singapore authorised 45 new VC funds to operate under the Venture Capital Fund Manager (VCFM) regime. Tech companies are driving most of the new investment, and key sectors are fintech, manufacturing, eCommerce, and biotech. The government is promoting innovation and trying to establish itself as a regional and global leader in the venture space, so regulations are typically pro-funds. Venture funds are typically structured as limited partnerships. Limited partnerships in Singapore do not have a separate legal personality and investors are not personally liable for debts or obligations beyond their capital commitment to the fund provided the investor is not involved in the management of the fund. Note that obtaining a VCFM license is a 2-3 month process in most cases. In order to receive approval for the license, the Monetary Authority of Singapore (MAS) requires funds to have at least two full-time employees in Singapore and a physical office there. Foreign workers would need to apply for employment passes.
There are prospectus and registration requirements in Singapore related to the offering of fund interests to investors located in Singapore, though a venture fund may rely on an exemption from registration. Typically, an offer to sell securities must be registered with MAS. If the fund is a collective investment scheme, the fund must be approved by MAS. Note this applies to both funds organized in Singapore and outside of Singapore. You should consult legal counsel if you have any questions related to offering securities in foreign jurisdictions to ensure you are complying with local fund marketing regulations.
There are several tax incentive schemes that venture funds may qualify for. For example, funds that have the necessary approvals and licenses from MAS and commit to investing a certain percentage of capital in Singapore based companies may qualify for the Section 13H tax incentive. Funds approved for this tax incentive are exempt from certain taxes for up to 15 years on specified income from certain types of investments that include but are not limited to gains from the divestment of portfolio holdings and dividend income from foreign portfolio companies. The Section 13R tax incentive is another popular scheme for venture funds that exempts them from specified income on designated investments. In order to be eligible for the Section 13R tax incentive, venture funds are required to use a Singapore-based fund administrator, and there is a minimum required annual business spend of S$200,000.
Singapore’s access to the fast-growing markets in APAC and its well-developed infrastructure has made it an attractive jurisdiction to domicile funds in the region. Singapore and Mauritius (see below) are both attractive jurisdictions for funds investing in India. In 2020, over 950 foreign portfolio investors registered in Mauritius and Singapore managed more than $100B in assets under custody in India.
More Domicile Analysis
For more information on fund domiciles, including details and analysis below:
- Venture Capital Domicile Report
- Fund Domicile in Delaware, United States
- Fund Domicile in Ontario, Canada
- Fund Domicile in Singapore
- Fund Domicile in Hong Kong
- Fund Domicile in Caymans
- Fund Domicile in Mauritius
- Fund Domicile in the Netherlands
- Fund Domicile in Luxembourg
- Fund Domicile in Estonia
- Fund Domicile in the United Kingdom