While the Chinese mainland is by far the biggest market in the Asia-Pacific (APAC) region with US$10.8 trillion in assets under management (AUM), Singapore is the second largest with US$4.2 trillion,^* largely due to its vibrant institutional market as well as recent retail growth.

An example of Singapore’s impressive development as an asset management centre is the rapid increase in family offices situated in the country. According to the Monetary Authority of Singapore (MAS), the number of family offices in the country has leapt from 50 in 2018 to around 1,400 by end of 2023.^* This growth is the result of a conscious effort by MAS and government agencies such as the Economic Development Board (EDB) of Singapore to introduce policies that make the country more competitive for international wealth managers.

The introduction of the VCC product in January 2020 provides a good example of an innovative development that has prompted an influx of foreign investors into Singapore from across APAC. Indeed, it has triggered a VCC boom in the city state, with fund managers launching more than 1,000 open- and closed-ended funds, representing over 2,000 sub-funds in both public and private markets.

MAS, which launched the scheme together with the Accounting and Corporate Regulatory Authority of Singapore (ACRA), was initially to present an attractive incentive that was slated to run for three years. This incentive, albeit revised, has now been extended to January 2025, and market participants say the VCC pipeline remains both strong and increasingly innovative.

So, how does the VCC framework support Singapore’s value proposition as an asset and wealth management location of choice? And what successes have its adopters experienced to date?

To find out, we spoke to Bryan Goh, CEO of TSAO Family Office, Jek Aun Long, Asia Head of Funds at Simmons & Simmons and Thomas Kaegi, Head of Singapore and Southeast Asia at UBS Asset Management to understand their perspectives. In this article, we discuss how VCCs have further strengthened Singapore’s position as the Asian hub for fund domiciliation and management, its flexibility and tax advantages, as well as success stories from our clients.