Singapore VCC insights
Budgeting for VCC costs after the VCC Grant Scheme lapsed: what support remains
The Variable Capital Companies Grant Scheme (VCCGS), which previously co-funded a share of VCC incorporation costs, lapsed on 15 January 2025 and has not been renewed, so sponsors budgeting a new VCC today must plan for the full incorporation and running cost stack without grant co-funding, though separate tax incentive schemes for qualifying funds remain available and are frequently confused with the lapsed grant.
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
What the VCCGS offered while it was live
The VCCGS was introduced by the Monetary Authority of Singapore (MAS) on 15 January 2020, funded through the Financial Sector Development Fund, with an original three-year validity period that ran to 15 January 2023. Under the original scheme, the Financial Sector Development Fund co-funded up to 70% of qualifying expenses paid to Singapore-based service providers for work performed in connection with VCC incorporation or registration, capped at S$150,000 per application, with a stated maximum of three VCCs per fund manager able to benefit. Following strong adoption of the VCC structure, MAS announced on 13 January 2023 that the scheme would be extended for a further two years, from 16 January 2023 to 15 January 2025, as the “Extended VCCGS.” The extension came with materially reduced terms: co-funding was cut from 70% to 30% of qualifying expenses, the cap per application was reduced from S$150,000 to S$30,000, and eligibility was narrowed to first-time qualifying fund managers who had not previously incorporated a VCC, redomiciled a foreign entity as a VCC, or previously applied for the grant.
The Extended VCCGS’s two-year validity period ended on 15 January 2025 and was not renewed or extended further. As of this writing, no application for VCCGS co-funding can be made for a VCC incorporated or registered after that date, and sponsors researching VCC costs should treat any reference to an “open” or “current” VCC Grant Scheme as describing a historical scheme, not a live one.
Who this matters to now
This is relevant to three groups of readers: sponsors currently budgeting a new VCC incorporation who need an honest answer on whether any co-funding exists before finalising a cost estimate; sponsors who incorporated a VCC while the scheme was live and are reconciling a historical VCCGS claim or audit query; and advisers and finance teams who need to correct outdated marketing material, cost calculators, or internal budgeting templates that still reference the scheme as available.
Budgeting without grant co-funding: what changes
Without VCCGS co-funding, a sponsor incorporating a single VCC should expect to bear the full professional fee stack directly, commonly in the range of S$15,000 to S$35,000 for legal and corporate-services fees for a non-umbrella VCC, rising to roughly S$40,000 to S$70,000 for an umbrella VCC launching with three or more sub-funds, on top of ACRA’s fixed statutory fees of S$15 for the name application and S$8,000 for registration, plus S$400 per sub-fund. Under the Extended VCCGS at its final terms, a first-time qualifying fund manager could previously have recovered up to S$30,000 of qualifying costs; that recovery is simply unavailable for any VCC incorporated after 15 January 2025, and the full incorporation budget should be modelled on gross professional fees rather than a net-of-grant figure.
What is sometimes confused with the lapsed grant
Sponsors researching VCC costs frequently conflate the lapsed VCCGS with two separate, still-live regimes that address a different problem: tax treatment of fund income, not incorporation cost. The Section 13O (onshore fund) and Section 13U (enhanced-tier fund) tax incentive schemes under the Income Tax Act 1947 allow qualifying funds, including those structured as VCCs, to obtain tax exemption on specified income subject to meeting economic criteria such as minimum fund size and local business spending, and MAS administers the application and conditions for both. These schemes reduce the ongoing tax cost of operating a qualifying fund, but they do not reimburse or co-fund incorporation or professional fees in the way the VCCGS did, and sponsors should not expect a 13O or 13U award to offset incorporation cost quotes. A second point of confusion is the MAS AML/CFT framework for VCCs under Notice VCC-N01, issued under section 84 of the Variable Capital Companies Act 2018 (VCCA): this is a compliance obligation requiring engagement of an eligible financial institution, not a cost-support scheme, and the fees associated with EFI onboarding are a cost sponsors bear, not a benefit they receive.
Common mistakes and rejection reasons
The most consequential mistake is a sponsor building an incorporation budget around an assumed VCCGS co-funding amount sourced from an outdated article, provider marketing page, or cost calculator that has not been updated since January 2025, only to discover during the engagement letter stage that no such co-funding is available, which can derail an approved internal budget. A second mistake is assuming that because the original VCCGS was generous (70% co-funding, S$150,000 cap), any residual version of the scheme must still offer similar terms; the extended scheme that preceded the lapse was already reduced to 30% co-funding and a S$30,000 cap, and no version of the scheme currently exists at any funding level. A third mistake is conflating 13O/13U tax incentive status, which is about the tax treatment of fund income over the life of the fund, with incorporation cost support, leading sponsors to under-budget the professional fees required at incorporation under the mistaken belief that a tax incentive award will offset them.
Why the scheme lapsed and whether it might return
MAS framed the Extended VCCGS from the outset as a transitional measure intended to support the VCC structure through its early adoption phase, when the vehicle was unfamiliar to many sponsors and service providers and the cost of being an early mover was correspondingly higher. By the time the extension was announced in January 2023, the VCC framework had already demonstrated strong adoption, with industry reporting put the number of incorporated VCCs at around 470 by the end of 2021 and approaching 800 by the start of 2023, which is part of why the extended terms were deliberately narrower: a lower co-funding percentage, a lower cap, and eligibility restricted to first-time fund managers only, rather than simply rolling over the original generous terms. Read against that trajectory, the scheme’s final lapse in January 2025 reads less as a sudden withdrawal of support and more as the planned endpoint of a deliberately tapering subsidy, once the structure had reached a level of market adoption where cost-based incentives were judged no longer necessary to sustain growth.
Sponsors asking whether a successor scheme might be announced should treat this as a genuinely open question rather than something this article, or any other secondary source, can answer with confidence; MAS schemes are periodically introduced, extended, narrowed or allowed to lapse in response to market conditions, and the only reliable way to confirm the current position is to check directly with MAS or ACRA, or with an adviser who tracks grant and incentive announcements as part of their practice, before finalising a budget on the assumption that no support exists or that support may return.
Step-by-step: how to budget correctly today
Start by confirming with the fund’s own advisers, not a general web search, that the VCCGS has in fact lapsed and is not being revived or replaced by a successor scheme at the time of planning, since the fiscal landscape can change and this article reflects the position as at the time of writing. Next, build the incorporation budget on gross professional fees using current quotes from at least two providers, without assuming any grant offset. Separately, assess whether the fund qualifies for Section 13O or 13U tax incentive treatment, and treat that assessment as a distinct workstream addressing tax efficiency over the fund’s life, not as a source of incorporation cost relief. Finally, budget the EFI onboarding and ongoing AML/CFT compliance costs under MAS Notice VCC-N01 as a recurring compliance cost, separate from both the lapsed grant and the tax incentive application.
Cost and timeline specifics
Where sponsors previously relied on the Extended VCCGS’s S$30,000 cap to offset roughly 30% of qualifying incorporation costs, the absence of that offset today effectively raises the net cost of incorporation by a comparable amount, meaning a sponsor who previously might have netted an incorporation cost of roughly S$35,000 to S$49,000 after grant co-funding on a S$50,000 to S$70,000 gross quote should now budget the full S$50,000 to S$70,000 without offset. Section 13O and 13U applications, by contrast, typically take several months to process through MAS and are assessed on fund-level economic criteria rather than incorporation cost, so sponsors should not expect a quick timeline comparison between the two.
Practical checklist before signing an incorporation engagement letter
Before signing an engagement letter for a new VCC incorporation, sponsors should confirm in writing with their provider that no grant co-funding assumption has been built into the quoted fee, since a provider using an outdated internal costing template could inadvertently understate the fee a sponsor will actually be asked to pay once the VCCGS is correctly treated as lapsed. Sponsors should also ask their tax adviser, separately from the incorporation engagement, whether the fund structure is likely to qualify for Section 13O or 13U treatment, and build that assessment into the fund’s ongoing tax budget rather than its incorporation budget, so the two workstreams are not conflated when the board or investment committee reviews overall setup costs. Finally, sponsors should keep a written record of the date on which cost quotes were obtained, since both statutory fees and typical professional fee ranges can shift over time, and a quote obtained more than a few months before incorporation should be refreshed rather than relied upon as current.
FAQs
Is there any successor scheme to the VCC Grant Scheme?
At the time of writing, no replacement co-funding scheme for VCC incorporation costs has been announced; sponsors should verify the current position directly with MAS or ACRA before finalising a budget, since scheme landscapes can change.
Can a VCC incorporated in 2024 still claim the Extended VCCGS retroactively?
No. Applications had to be made within the scheme’s validity period, which ended 15 January 2025; a VCC incorporated before that date but which did not apply within the relevant window would not be able to claim retroactively after the scheme lapsed.
Do 13O and 13U incentives reduce the incorporation fee quoted by my provider?
No, 13O and 13U are income tax exemption schemes affecting the fund’s tax position on specified income once operating, not incorporation cost support, and they have no bearing on the professional fee quote for setting up the VCC.
Was the original VCCGS cap really five times higher than the extended version?
Yes. The original scheme capped co-funding at S$150,000 per application at a 70% co-funding rate, while the Extended VCCGS reduced this to a S$30,000 cap at a 30% co-funding rate for first-time qualifying fund managers only.
Does the lapse of the VCCGS affect existing VCCs that already received the grant?
No, VCCs that successfully claimed the grant while the scheme was live keep what they received; the lapse only means no new applications can be made for VCCs incorporated after 15 January 2025.
Related guides
For the mechanics of how the 30% co-funding worked while the scheme was live, see our companion article on the VCC Grant Scheme (VCCGS) co-funding mechanics. For the fund manager licensing considerations that sit alongside this budgeting decision, see Raffles Corporate Services’ note on MAS Licensed Fund Management Company (LFMC) licensing, and for the related family office filing obligations that often accompany a VCC sponsor’s wider compliance calendar, see Singapore Secretary Services’ MAS notification filing checklist for single family offices.
For the authoritative position on current MAS schemes and initiatives, consult the MAS schemes and initiatives hub, for ACRA’s statutory VCC fee schedule see ACRA’s VCC service and transaction fees page, and for the tax treatment of qualifying funds see IRAS.
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.