To set up a fund management entity in Singapore, you can choose from several legal structures depending on the type of fund management activities you plan to undertake, your target investors, and regulatory requirements. Below are the key types of entities and licenses relevant for fund management in Singapore:

1. Legal Entity Structures

You will need to establish a legal entity, typically in one of the following forms:

  • Private Limited Company: This is the most common structure for fund management firms. It is incorporated under the Companies Act and offers limited liability to its shareholders.
  • Limited Partnership (LP): Suitable for investment funds, where the General Partner (GP) manages the fund and the Limited Partners (LPs) contribute capital.
  • Variable Capital Company (VCC): A flexible corporate structure designed specifically for investment funds. It allows for the creation of umbrella funds with multiple sub-funds under a single legal entity, each with segregated assets and liabilities.

 

 

2. Regulatory Licensing by MAS

The Monetary Authority of Singapore (MAS) regulates fund management activities. Depending on your business model, you will need one of the following licenses:

a. Capital Markets Services (CMS) License for Fund Management

  • Required for entities managing funds on behalf of accredited or institutional investors.
  • Categories include:
    • Retail Fund Management Companies (RFMC): Can serve all types of investors, including retail.
    • Accredited/Institutional Fund Management Companies (A/I FMC): Restricted to accredited or institutional investors.

b. Venture Capital Fund Manager (VCFM) Exemption

  • For fund managers managing only venture capital funds.
  • Subject to a simplified application process and lighter regulatory requirements.

c. Registered Fund Management Company (RFMC)

  • For small-scale managers:
    • AUM (Assets Under Management) capped at SGD 250 million.
    • Can serve up to 30 qualified investors (of which no more than 15 can be funds).

d. Exempt Fund Manager

  • Certain managers may qualify for exemptions from licensing under specific conditions, such as managing funds only for related corporations.

3. Considerations

  • Target Investors: Determine whether your investors are institutional, accredited, or retail, as this affects licensing requirements.
  • Assets Under Management (AUM): The expected AUM determines whether you qualify for RFMC, CMS, or VCFM.
  • Compliance Obligations: Licensed entities must comply with MAS regulations, including risk management, AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism) requirements, and ongoing reporting obligations.
  • Staffing Requirements: Licensed fund managers must have qualified and experienced personnel, including directors and representatives.

Steps to Set Up

  1. Incorporate a Legal Entity: Register your entity with the Accounting and Corporate Regulatory Authority (ACRA).
  2. Apply for MAS Licensing: Submit your application through the MAS e-service portal.
  3. Prepare Policies and Procedures: Ensure compliance with regulatory requirements, including governance, risk management, and internal controls.
  4. Recruit Key Personnel: Ensure your team meets MAS fit-and-proper criteria.

 

If you have any additional queries regarding the setting up of a fund management entity, you may contact [email protected].

 

Yours sincerely,

The editorial team at Raffles Corporate Services