VCC 13U enhanced-tier — application and conditions — Costs and fees breakdown
The VCC 13U enhanced-tier exemption grants tax-exempt treatment on specified income for a Variable Capital Company managed from Singapore, subject to a minimum fund size of S$50 million and committed local business spending. Approval by the Monetary Authority of Singapore usually takes about three to four months from a complete application.
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
What the VCC 13U enhanced-tier scheme is
The VCC 13U enhanced-tier incentive is the enhanced-tier fund exemption applied through the Variable Capital Company structure. The exemption under section 13U of the Income Tax Act 1947 exempts specified income derived from designated investments, and the VCC itself is constituted under the Variable Capital Companies Act 2018, which establishes the fund vehicle, its sub-funds and segregation of assets and liabilities. Together they give fund managers a single corporate vehicle with a fund-level tax exemption.
Who it suits
The 13U tier is designed for larger funds and family offices with substantial assets and a genuine Singapore management presence. Because the minimum fund size is higher than the 13O tier, it suits managers who can commit S$50 million in assets and meet the associated spending and headcount conditions, in exchange for greater flexibility on investor profile and fund residence.
Key conditions
- Minimum fund size: at least S$50 million in assets under management at the point of application.
- Local business spending: a minimum annual business spend in Singapore, typically S$500,000 or more depending on AUM.
- Investment professionals: at least three, of whom at least one meets the experience threshold.
- Fund manager: a Singapore-based manager holding a capital markets services licence or an exempt status recognised by MAS.
Costs and fees breakdown (2026)
- VCC incorporation and constitution: S$8,000 to S$15,000 including legal drafting.
- MAS incentive application (advisory and submission): S$15,000 to S$40,000 depending on complexity.
- Annual fund administration and corporate secretary: from S$18,000.
- Annual audit: from S$10,000, as a VCC must appoint an auditor and file financial statements.
- MAS assessment time: approximately three to four months.
How 13U compares to 13O and 13D
The three fund exemptions differ mainly on size, investor and residence. For a side-by-side view of the onshore tiers, see our comparison of Section 13O versus 13U family office tax incentives, and our guide to the VCC 13O tax incentive application and conditions. Family offices structuring wealth alongside a fund should also review the Private Trust Company (PTC) setup benchmarks.
Common mistakes and gotchas
The frequent issues are applying before the manager’s licensing is settled, underestimating the annual local spend commitment, and assuming the exemption covers all income — it applies to specified income from designated investments, not everything the fund earns. Changes to fund size or manager after approval must be notified to MAS, as ongoing conditions apply for the life of the award.
FAQs
What is the minimum fund size for the VCC 13U enhanced-tier? At least S$50 million in assets under management at application.
How long does MAS take to approve a 13U application? Typically three to four months from a complete submission.
Can a family office use 13U? Yes, provided it meets the fund size, spending and professional-headcount conditions.
Is all fund income exempt? No. Only specified income from designated investments is exempt under section 13U.
Authoritative references: the Monetary Authority of Singapore explainer on the VCC and the Accounting and Corporate Regulatory Authority (ACRA).
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.