Abacus Capital

Henley & Partners - The Firm of Global Citizens® recently evaluated 27 countries and reported through The Straits Times that Singapore is the third-best country to build multi-generational wealth. It is no wonder that Asia's growing ranks of wealthy individuals and families have set their eyes on Singapore to establish their family offices. To date, the Republic has seen over 1,400 Single-Family Offices (SFOs) set up over the past 5 years, according to statistics published by Singapore Economic Development Board (EDB). Despite its exponential growth, the influx of SFOs into Singapore is not without its fair share of issues and challenges. The impact of an increased level of compliance and enhanced scrutiny on SFOs will ultimately increase the already high costs required to set up an SFO and most likely tighten the single-family office circle in Singapore by increasing the qualifying conditions. Abacus Capital weighs out the pros and cons here: https://lnkd.in/gNcXhz9C

“The VCC fund structure is growing in popularity as an alternative to Single Family Offices in Singapore, since it is more cost-effective, more flexible in terms of the investors that it can onboard, and in terms of the types of investment that it can make. Finally, the VCC manager being a regulated investment manager would be able to perform due diligence on the investors at inception and on an ongoing basis, ensuring that the structure is kept compliant with the latest regulatory requirements.” – Hogi Hyun, Managing Director, Abacus Capital

The Variable Capital Company (VCC), established as a new investment fund regime in Singapore comprises the best features of the European UCITS, SICAVs, and the Cayman SPCs. It serves as an alternative to the Singapore single-family office regime for private clients and business families seeking to diversify and consolidate their wealth in Singapore while receiving the same tax incentive schemes, in addition to additional benefits such as significant cost savings, professional management, and oversight from an experienced investment manager, like ourselves. Additionally, all VCCs must be managed by a Monetary Authority of Singapore-licensed fund management company. Investment managers that are not based in Singapore or do not have a fund management regulated status, e.g. SFOs, cannot operate a VCC.     The billion-dollar money laundering incident in August 2023 has added fresh impetus to regulatory scrutiny and requirements in Singapore. Family Offices here will soon face stricter checks and controls by the regulator when setting up their family offices, as one or more of the accused in this high-profile money laundering case has been identified to be linked to SFOs. As a regulated fund manager, Abacus Capital will undertake compliance-related matters on behalf of clients with the appropriate expertise and controls in place to conduct Know-Your-Customer (KYC) checks to deter the flow of illicit funds through Singapore’s financial system.