Singapore VCC insights

VCC vs Hong Kong LPF: Choosing the Vehicle for a Family’s Private Equity Programme

By VCC Editorial Team · Published 15 October 2026 · Updated 16 October 2026

Short answer: A Singapore VCC is a body corporate managed by a licensed or exempt fund manager, so no family member carries unlimited liability. A Hong Kong LPF is a partnership without legal personality whose general partner has unlimited liability. Hong Kong offers a statutory carried interest concession now; Singapore has announced one from YA 2027.

For a family running a private equity programme with co-investors, executives or a second generation, the VCC vs Hong Kong LPF question turns on four things: who bears liability for the fund’s obligations, how carried interest paid to non-family professionals is taxed, which fund exemption the vehicle relies on, and what the investor register discloses. This note compares the two on those points as at 15 October 2026. The corporate-fund comparison is in our Singapore VCC vs Hong Kong OFC series.

This article is general information only and is not legal, tax or immigration advice. For matters needing legal advice, we work with a panel of experienced Singapore law firms.

How do a VCC and a Hong Kong LPF differ in legal form?

A VCC is a body corporate with separate legal personality; an LPF is a limited partnership that, in the Companies Registry’s own words, “is not a legal person”. Everything else in this comparison follows from that difference.

A VCC under the Variable Capital Companies Act 2018 can sue, be sued and hold property in its own name, and its sub-funds are kept separate from one another. Investors are shareholders. An LPF is constituted by a limited partnership agreement under the Limited Partnership Fund Ordinance (Cap. 637, the LPFO), with one general partner, at least one limited partner (s 7(1)(b)) and an office in Hong Kong (s 7(1)(g)). The partnership agreement carries the economics.

Co-investors in private equity often expect partnership terms: capital calls, a waterfall and GP clawback. A VCC can replicate those through share classes and its constitution (see verifying a private equity VCC distribution waterfall), but some third-party investors will still ask for an LPA.

Feature	Singapore VCC	Hong Kong LPF
Legal form	Body corporate, separate legal entity	Limited partnership, no legal personality
Liability of sponsor	No partner with unlimited liability; manager and directors carry statutory duties	General partner has unlimited liability (LPFO s 19(1))
Investor liability	Shareholders	Limited partners capped at agreed contribution (s 26(4)), lost if they take part in management (s 26(5))
Manager requirement	Manager holding a CMS licence for fund management or exempt under SFA s 99(1)(a) to (d) (VCC Act s 46)	Investment manager who is a Hong Kong resident aged 18 or over, a company or a registered non-Hong Kong company (s 20)
Government fees to form	S$15 + S$8,000; S$400 per sub-fund	HK$2,555 + HK$479
Investor register	Kept by the VCC (s 81); not public	Register of partners kept but not open to public inspection (ss 29 and 30)
Carried interest	Exemption announced, expected from YA 2027	Schedule 16D concession in force since 1 April 2020
Fund tax exemption	Sections 13O or 13U (MAS approval), to 31 December 2029	Unified fund exemption, ss 20AN and 20AO, Cap. 112

What does general partner liability mean for a family?

In an LPF the general partner is liable without limit for all the fund’s debts and obligations, and has ultimate responsibility for its management and control (LPFO s 19(1) and (2)). In practice families ring-fence this by using a limited company as the general partner, which the eligibility rules expressly allow (s 7(1)(c)(ii) and (iii)).

Two points need attention in a family setting.

• Family members as limited partners. A limited partner who takes part in the management of the fund becomes jointly and severally liable with the general partner for obligations incurred while it does so (s 26(5)). Schedule 2 to the LPFO lists safe-harbour activities, and s 27 confirms that a conflict-of-interest decision is not by itself management. A patriarch who sits on the investment committee as an LP needs that role mapped against Schedule 2.
• Authorised representative. If the general partner is itself an LPF or a non-Hong Kong partnership without legal personality, an authorised representative must be appointed and becomes jointly and severally liable alongside the general partner (s 19(3) and s 23).

A VCC removes this layer. There is no partner with unlimited liability, and investors hold shares. The trade-off is that the VCC must at all times have an eligible manager and at least one Singapore-resident director (VCC Act ss 46 and 48), so the family cannot simply manage the vehicle informally through a holding company. A Singapore limited partnership carries the same unlimited general partner liability as an LPF (Limited Partnerships Act 2008, s 3(3)); we compare that option in Singapore VCC vs Singapore limited partnership.

How is each vehicle formed, and who must be appointed?

Both are registration regimes with a regulated party at the centre: the VCC through its fund manager, the LPF through its responsible person for anti-money laundering purposes. An LPF can normally be registered in days; a VCC takes longer because ACRA may refer the application to other authorities.

Registering a Hong Kong LPF:

1. Settle the limited partnership agreement and confirm the general partner meets s 7(1)(c).
2. Appoint the investment manager (s 20), an independent auditor that is a practice unit under the Professional Accountants Ordinance (s 21), and custody arrangements set out in the agreement (s 22).
3. Appoint a responsible person to carry out anti-money laundering measures (s 33): an authorised institution, licensed corporation, accounting professional or legal professional.
4. A Hong Kong law firm or solicitor files Form LPF1 with the IRBR4 business registration notice and the fees of HK$2,555 and HK$479, as set out in the Companies Registry’s LPF registration pamphlet.
5. After registration, notify the Commissioner of Inland Revenue in writing within one month of starting business.

Registering a Singapore VCC:

1. Engage the fund manager, which must be licensed or exempt under the Securities and Futures Act 2001 (VCC Act s 46). A single family office should first resolve whether it can act; see our note on the permissible fund manager problem.
2. Appoint at least one director ordinarily resident in Singapore and one director who is a director or qualified representative of the manager (s 48), plus a company secretary and an auditor.
3. Reserve the name (S$15) and register the VCC (S$8,000) on the VCC Portal; foreigners without Singpass must use a corporate service provider, and ACRA indicates 14 to 60 days including any referral to other authorities.
4. Register each sub-fund (S$400) and engage an eligible financial institution for anti-money laundering checks under MAS Notice VCC-N01.

VCC vs Hong Kong LPF: how do the carried interest regimes compare?

Hong Kong has a statutory carried interest concession in force; Singapore has announced one but not yet legislated it. For a family programme, this matters mainly where carry is paid to non-family investment professionals rather than to the family’s own vehicle.

Hong Kong’s regime, introduced by the Inland Revenue (Amendment) (Tax Concessions for Carried Interest) Ordinance 2021, taxes eligible carried interest at 0 per cent for profits tax and excludes all of it from employment income for salaries tax. It covers carry received on or after 1 April 2020 for investment management services provided in Hong Kong to a fund certified by the Hong Kong Monetary Authority. Today the carry must arise from specified private equity transactions, and the definition refers to a hurdle rate in the fund’s governing agreement.

The Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 would:

• remove the HKMA certification requirement;
• remove the hurdle rate reference, so a sum can qualify without a stated preferred return;
• extend eligible sources beyond private equity to other fund profits; and
• allow carry to reach qualifying employees through a personal investment company.

The Bill had its first reading on 24 June 2026. On 12 August 2026 the Financial Services and the Treasury Bureau said clause-by-clause examination was complete and that it aimed to resume second reading in the second half of 2026, with effect from 2025/26 if passed. We had not confirmed enactment from an official source at the date of review, so families should treat the enhancements as pending.

In Singapore, MAS and the Ministry of Finance announced on 19 August 2026 a planned exemption for profit-related returns received for fund management services to qualifying funds, whether received by companies, partnerships or individuals. It is expected from Year of Assessment 2027, with details at Budget 2027. Until then there is no dedicated carry exemption, and the treatment of a carry share follows general principles.

Which fund tax exemptions apply to each vehicle?

A VCC relies on a MAS-approved incentive under section 13O or 13U of the Income Tax Act 1947. An LPF relies on Hong Kong’s unified fund exemption, which does not require pre-approval but carries its own conditions.

IRAS treats a VCC as a company for income tax and, even with several sub-funds, as a single entity unless stated otherwise (IRAS e-Tax Guide, Tax Framework for VCCs, fourth edition, 22 April 2026). The section 13O and 13U schemes are available to VCCs and, under Budget 2024, run to 31 December 2029. The conditions have been revised since MAS’s 2023 version, so check the current MAS circular before relying on any threshold. We have not repeated the thresholds here; they are set out in our notes on Hong Kong FIHV vs Singapore 13O and 13U.

Hong Kong’s unified fund regime (ss 20AN and 20AO, Cap. 112) has applied since April 2019. It exempts profits from transactions in Schedule 16C qualifying investments, including private company shares, subject to immovable property, holding period, control and short-term asset tests (ss 20AP and 20AQ). For a buyout or growth programme, those tests decide whether exits are exempt. The 2026 Bill would:

• add loans, digital assets and interests in non-corporate entities to qualifying investments;
• remove the 5 per cent cap on incidental transactions;
• exempt a fund’s special purpose vehicles in full, whatever the fund’s percentage holding;
• require at least two qualified employees and HK$2 million of annual operating expenditure in Hong Kong; and
• introduce initial and annual tax notifications, with records kept for at least seven years.

A family whose LPF is really a single-family pool should also test the alternative family-owned investment holding vehicle regime, which our Singapore vs Hong Kong family office comparison covers.

What reporting and confidentiality applies to each?

Both keep the investor list off the public register. The LPF Register shows the fund’s particulars but not the register of partners. The VCC’s register of members is held by the VCC and is not public.

For an LPF, the general partner files an annual return within 42 days after each anniversary of registration (LPFO s 24). The auditor must be independent of the general partner and investment manager and audit the financial statements annually (s 21(3)). Audited accounts, the register of partners and customer due diligence records are kept for the authorities (s 29). They must not be made available for public inspection, although every partner may inspect the financial statements (s 30).

A VCC holds an annual general meeting, files an annual return (ACRA fee S$1,600) and keeps its register of members under VCC Act s 81. ACRA confirms that the member list is not public, although public authorities can request it. On discretion the two regimes are broadly similar.

Which vehicle suits a family private equity programme?

The VCC suits a family that wants corporate limited liability, umbrella sub-funds for different branches or vintages, and a Singapore base for the family office. The LPF suits a programme that will take third-party LP money on market terms and pay carry to a Hong Kong-based team under a concession that is already law.

Four questions usually settle it:

1. Where will the investment team sit? Both carry regimes reward management services performed locally, and the Bill’s proposed substance test for Hong Kong funds is two qualified employees and HK$2 million of local spending.
2. Will non-family investors join? If so, expect demand for LPA terms, which favours the LPF or a Singapore limited partnership.
3. Who receives the carry? If carry stays within the family, the carry concession matters less than the fund exemption.
4. Can the family accept a general partner with unlimited liability, even inside a limited company? If not, the VCC is the cleaner answer.

The vehicle should follow the family office, not lead it. For corporate secretarial support on the Singapore side, see Raffles Corporate Services.

Frequently asked questions

Can a Hong Kong LPF have a single limited partner who is a family holding company?

The LPFO requires one general partner and at least one limited partner. Where all partners are corporations in the same group, s 7(2) allows registration only with a statement acknowledging that the Registrar may later strike the fund off the register on that basis.

Does a VCC need a licensed fund manager?

Yes. Section 46 of the VCC Act requires a manager that holds a capital markets services licence for fund management, is exempt under section 99(1)(a) to (d) of the Securities and Futures Act 2001, or falls within a prescribed class. A VCC cannot be its own manager.

Is the Hong Kong 2026 fund tax Bill law yet?

As at 15 October 2026 we had not confirmed enactment from an official source. The Government said on 12 August 2026 that it aimed to resume second reading in the second half of 2026, with retrospective effect from year of assessment 2025/26 if passed.

Does Singapore tax carried interest today?

Singapore has no dedicated carried interest exemption yet. MAS has announced one for profit-related returns from fund management services, expected from Year of Assessment 2027, with details at Budget 2027.

Can a Singapore limited partnership claim section 13O?

Yes. Budget 2024 extended the section 13O scheme to limited partnerships registered in Singapore from 1 January 2025, which gives families a Singapore partnership option alongside the VCC.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email hello@rafflescorporateservices.com. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.

Last reviewed: 15 October 2026. The Editorial Team, variablecapitalcompaniesact.com.

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