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Fund management license in Singapore

Published:
May 10, 2023

Storage of money can and should be realized in lands having a positive climate. One perfect place for it on our planet is Singapore. Governmental bodies in region are trying to do everything to continue the flow of investment into the country. In particular, it created versatile rules for corporations who want to do business-activities in country and provision comprehensive assets from governance. For Singapore fund management company registration, corporations need to meet certain prerequisites. Local norms are lenient than in European countries and the first thing to do is to establish a corporation and obtain a permit.

Types of fund management licenses in Singapore

It’s essential to understand basis of permits that can be obtained from a specialized government agency called MAS. Such organizations can issue the following permissions: 

  • LFMC-retail; 
  • LFMA A/1;
  • RFMC; 
  • VCFM;
  • VCC; 
  • Fintech. 

Each license has its specifics and you need to understand their differences from each other. Our firm is ready to help in hedge-fund establishment and the creation of other firms in territory of this country. 

LFMC Retail 

This permission is considered the highest level to get fund-management license Singapore. There’re no restrictions on the actions of capital-holders by class, and there are no restrictions regarding investment-projects. Most stringent prerequisites are applied to this license, and not all companies will be able to obtain it. 

For example, to obtain this permit, the lowest amount of capital should be 500 thousand SGD. This is money that must always be in the company’s account. If it is planned to provide collective investments, this amount should be doubled.

The corporation should be documented with state authorities and get local office. Additionally, it is crucial to have a compliance department and notify the regulator of all suspicious transactions. Also, the company is obliged to conduct an annual audit.

LFMA A/1

This license is slightly simpler than the previous version and is very similar to RFMC. Main difference is that it does not limit stock firms to investors with accreditation. Otherwise, the prerequisites for office, capital, and other criteria are identical to RFMC.

RFMC

One needs to possess assets of at least $250 thousand. However, number of capital-holders with accreditation cannot exceed 30 representatives. Of these, only half can be registered as funds.

To qualify as an accredited investor, entrepreneurs need to have earned the equivalent of S$300,000 in the previous year and possess financial assets of S$1 mln or personal funds doubled. An investor who fulfills 1 of these conditions will be able to obtain this status. 

VCFM

This format of the license is considered the simplest. The main condition for obtaining it is to invest at least 80% of the capital on certain goods. Quite often firms with such a permit invest in various start-ups, securities, and other documents. There are no prerequisites for them to have the basic aids, but organization intending to operate this permit needs to be documented locally and possess its own office. 

VCC

Such a license that may be obtained after the fund registration in Singapore is a relatively recent phenomenon. It is mostly issued by investment funds. Such corporations can have a variable capital structure and pay dividends to their shareholders.

They are used as separate funds or umbrella corporations with several sub-funds. However, the sub-fund must not use assets of similar satellites. Corporations with this type of license are needed to keep a register of shareholders, but it is not necessarily made public. Firm needs to have at least 1 director, office, a secretary, an auditor, and a fund manager. 

Fintech

This group combines all licenses that are issued for investing in financial technology. For example, it is the operation of payment institutions, currency exchange, crypto-currency transactions, and start-ups in Fintech-sphere. Companies must carry out transactions of no more than S$3 mln for a single payment service (double that if there are two or more). 

Norms for corporations to get a permission

Before setting up fund-management company in Singapore begins, entrepreneurs should understand prerequisites applying to businesses seeking to obtain appropriate permits. Before issuance, MAS checks: 

  • applicants, corporation heads, and stockholders for involvement in illegal transactions;
  • their skills and expertise in dealing with funds;
  • risks in starting a corporation;
  • study the company’s business-model and forecasts for its development.

On average, application-forms of firms for maximum licenses may last 6 months; for simpler licenses it’s up to four months. In the case of denial of a permit, corporation can reapply within 6-months-period.

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