Marie Lee
Executive Director

Marie Lee is the Executive Director helming the Restructuring and Recovery practice of Baker Tilly Singapore.

With over 15 years of experience in corporate restructuring and insolvency, she has built her career at Baker Tilly, specialising in judicial management, liquidation, schemes of arrangement, and bankruptcy solutions.

During her extensive tenure at Baker Tilly, Marie has not only honed her craft but has also been actively involved in assisting experienced insolvency practitioners. Her dedication has seen her assisting and gaining firsthand experience through many landmark cases, establishing her as a formidable expert.

Marie collaborates with companies, creditors, and stakeholders to maximise recoveries and streamline financial restructuring across various sectors including funds, healthcare and technology. Clients frequently commend her problem-solving ability, practicable advice and attentiveness to their concerns, reinforcing her reputation for exceptional service and effective results. She is a licensed insolvency practitioner and a member of INSOL International, the International Women’s Insolvency & Restructuring Confederation (IWIRC), the Insolvency Practitioners Association of Singapore (IPAS) and the Institute of Singapore Chartered Accountants (ISCA).

Beyond her professional duties, Marie is committed to advancing her interest in the field of restructuring and insolvency through continuous education. She is deeply interested in reading judgments written by judges on insolvency matters, acquiring progressive knowledge of the decisions and intricate understanding how the laws were interpreted.

Marie Lee’s comprehensive approach and unwavering commitment make her an invaluable asset to Baker Tilly and a trusted advisor to her clients. Her ability to navigate complex financial landscapes and devise innovative solutions continues to drive her success and influence in the industry.

Future-Proofing Fund Vehicles: The Road to VCC-IRDA Alignment in Singapore

Introduction

Over the past decade, Singapore has adopted a coordinated regulatory and institutional strategy aimed at entrenching its status as a major international asset management centre. This strategy has emphasised legal stability, regulatory credibility and institutional responsiveness, while capitalising on Singapore’s geographical position as a hub for Asia’s capital flows. Rather than displacing existing fund vehicles such as companies, limited partnerships and unit trusts, the legislators developed a complementary structure tailored specifically to the functional and commercial characteristics of investment funds.

The Variable Capital Company (“VCC”) framework was thus conceived and jointly introduced by the Monetary Authority of Singapore (“MAS”) and the Accounting and Corporate Regulatory Authority (“ACRA”) on 15 January 2020, following the enactment of the Variable Capital Companies Act 2018 (“VCC Act”). The introduction of the VCC framework represented a significant legislative intervention designed to strengthen Singapore’s fund domiciliation architecture and enhance its comparative appeal vis-à-vis established offshore and onshore fund jurisdictions.

The principles governing the VCC Act was a central departure from traditional company law but the VCC framework was ultimately able to resolve long-acknowledged frictions associated with using conventional entities as fund vehicles and accommodate both open-ended and closed-ended investment strategies within a single statutory framework at the same time.

Features of VCC

What truly distinguished the VCC regime from traditional corporate entities is the extent to which its statutory features are expressly tailored to the operational and commercial needs of the fund management industry. The VCC framework was designed to allow fund managers to prioritise investment execution and strategy development, rather than constantly resolving unnecessary frictions arising from corporate law constraints and duplicative compliance processes.

At a structural level, the VCC regime permits the establishment of umbrella structures comprising of multiple sub-funds, with each sub-fund benefiting from statutory ring-fencing of assets and liabilities. Although an umbrella VCC constitutes a single legal entity, the VCC Act mandates that the assets of one sub-fund cannot be used to satisfy the liabilities of another, including in insolvency. This feature enables fund managers to deploy multiple strategies, asset classes and investor mandates within a single corporate vehicle while preserving economic segregation and mitigating contagion risk across portfolios.

Complementing this structural flexibility is the concept of variable share capital. Unlike traditional companies constrained by capital maintenance rules, a VCC may freely issue and redeem shares at net asset value without shareholder approval and may make distributions out of capital. This allows for seamless investor subscriptions and redemptions, facilitates periodic distributions and supports both open-ended and closed-ended fund strategies. For investment managers, this represents a material reduction in operational friction and aligns the Singapore corporate fund vehicle more closely with global fund structuring norms.

The regime further supports operational efficiency through simplified fund administration. The umbrella VCC model allows sub‐funds to share a common board of directors and centralised service providers, including fund managers, administrators, custodians and auditors. This consolidation delivers meaningful economies of scale, reduces administrative duplication and lowers ongoing compliance costs.

The VCC regime is supported by a calibrated fiscal framework designed to ensure continuity and alignment with Singapore’s broader fund ecosystem. From the outset, Singapore adopted a policy approach that allows VCCs (subject to prescribed conditions) to access existing incentive schemes under the Income Tax Act. This facilitates a smooth transition for fund managers migrating from other Singapore structures or re-domiciling funds from overseas jurisdictions. VCCs may also leverage on Singapore’s extensive network of double tax agreements to support efficient cross-border investment activity.

The interaction between tax rules and the VCC’s legal architecture reinforces the regime’s emphasis on functional segregation and integrity. While an umbrella VCC is treated as a single entity for income tax purposes, income attribution is computed on a sub-fund basis before aggregation. Sub-funds are also treated as separate persons for stamp duty purposes and common tax attributes are tracked independently at the sub-fund level, preventing cross‐utilisation across unrelated strategies.

This dual-layered approach allows each sub-fund’s financial and compliance profile to be assessed independently, while preserving the efficiencies of operating under a unified legal structure. Together with the VCC’s flexible capital framework and streamlined administration, it supports operational efficiency and regulatory certainty.

Lifecycle of VCC

The lifecycle of a VCC is closely intertwined with the investment cycles it is designed to support. Following the launch of the VCC framework in January 2020, the market experienced a pronounced surge in new VCC formations as fund sponsors moved swiftly to take advantage of a purpose-built structure offering enhanced flexibility and operational efficiency. Many of these vehicles were brought to market within a short period and commenced operations across a wide range of strategies.

As these funds advanced through their respective investment horizons, the pace of new VCC formations began to moderate. This shift reflected a natural progression rather than a decline in interest. The initial wave of VCC launches gradually gave way to a more mature and stable phase of fund creation, which was consistent with the evolution of other established fund jurisdictions following the introduction of new vehicles. Over time, early-stage funds transitioned from deployment to realisation and the question of how VCCs would be brought to an orderly conclusion became increasingly relevant.

In practice, the cessation and wind-down of VCCs—particularly those structured as closed-ended funds—has emerged as a natural and inevitable phase of the fund lifecycle. Investment objectives are achieved or lapse upon expiry of fund terms, investors exit and the underlying legal structure must be wound up in a manner that is efficient, compliant and commercially sensible. This evolution highlights the fact that the true robustness of any fund vehicle lies not only in its flexibility at formation, but also in its ability to support an orderly and predictable exit.

While the concerted efforts of the MAS and the ACRA ensured that market participants were well prepared for the establishment and operation of VCCs, there was limited precedent or formal guidance addressing the mechanics of VCC wind‐downs at the outset. This gap became apparent when we received instructions to wind up Singapore’s first VCC and its sub-fund in 2021, a time when the practical application of winding up a VCC had yet to be tested in practice. The process required us to undertake close engagement with ACRA to address questions relating to documentation, sequencing of regulatory filings and the alignment of corporate dissolution procedures with fund-specific considerations. Practical solutions developed through this process eventually brought clearer administrative protocols and emerging best practices for VCC closures.

Taken together, the evolution of the VCC regime — from its rapid adoption, through active deployment, to its closure — demonstrates that the framework is both structurally resilient and operationally credible beyond the point of formation. The ability to both establish and conclude investment vehicles efficiently is essential to the integrity of any fund domicile. In this respect, Singapore’s experience with early VCC wind-downs underscores its capacity to support the complete lifecycle of modern investment funds, further strengthening its position as a sophisticated and responsive fund jurisdiction.

Legislative Gap

Singapore’s corporate, insolvency and accounting frameworks have historically evolved in tandem with industry developments and international best practices. Over the years, legislative refinements have addressed issues ranging from tax residency and anti-avoidance measures to fund-level governance and regulatory substance. This pattern of continual calibration reflects sustained engagement with market participants and has been central to Singapore’s reputation as a jurisdiction that benchmarks itself against leading global standards while remaining responsive to industry feedback.

Against this backdrop, our experience of winding up early VCC structures revealed a curious legislative decision beneath the modern veneer of the VCC framework. This led to extensive discussions with veteran insolvency lawyers to assess the statutory basis governing the cessation of VCCs during the process of winding up and revealed that the VCC statute continues to defer to the Companies Act for provisions relating to winding up and dissolution, despite the introduction of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”) on 30 July 2020.

This legislative design choice meant that VCCs remained subject to legacy corporate winding-up provisions even as Singapore modernised its insolvency landscape to provide a comprehensive, coherent and internationally aligned framework. For a structure expressly designed to serve sophisticated fund managers and global investors, this disconnect raised legitimate questions regarding statutory coherence and the alignment of the VCC regime with Singapore’s broader insolvency architecture.

While workable solutions were ultimately achieved in practice, the absence of explicit statutory alignment introduced avoidable complexity and underscored the importance of legislative coherence across the full lifecycle of innovative financial structures.

Reconciliation

After several years of continued reliance on the Companies Act for the winding-up of VCCs, legislators recognised that this legacy approach risked undermining regulatory clarity and operational certainty for fund managers, investors and other stakeholders within the fund management ecosystem. Consequently, the Variable Capital Companies (Amendment) Regulations 2026 was enacted to take effect from 01 April 2026 to align the insolvency and winding-up regime applicable to VCCs with the IRDA.

This legislative development represents an important reconciliation between the innovative objectives of the VCC framework and Singapore’s modern insolvency architecture. By bringing VCC wind-ups within the scope of the IRDA, the revised regime provides a more comprehensive and contemporary set of rules that reflect international best practices.

As VCCs are fundamentally designed as investment fund vehicles rather than operating companies, the VCC regime deliberately prioritises orderly exits and liquidations over restructuring or business rescue. Core features of the VCC — such as asset segregation at the sub-fund level, investor redemption mechanics and the maintenance of net asset value integrity — sit uneasily with traditional restructuring tools typically associated with corporate rescue, including creditor cram-downs, moratoria and rescue financing. Introducing restructuring mechanisms into the VCC framework could undermine valuation certainty, disrupt investor expectations and compromise the orderly operation of collective investment schemes.

As such, the alignment with the IRDA thus does not signal a shift toward rehabilitative insolvency processes for VCCs but rather, provides a modernised and coherent legal foundation for winding-up fund vehicles in a controlled and predictable manner. This approach reflects a policy choice that balances insolvency modernisation with the unique characteristics and commercial realities of investment funds.

Future of VCC

By offering a modern, flexible and investor-centric fund vehicle, Singapore has further consolidated its position as an innovation leader in the global asset management industry. The alignment of the VCC regime with the IRDA demonstrates Singapore’s continued commitment to maintain a resilient, coherent and forward‐looking financial sector — one that supports investment activity across the full lifecycle of a fund, from formation and deployment through to orderly wind-down.

For fund managers and investors, the alignment delivers greater certainty and transparency in the event of insolvency or fund termination, enhancing Singapore’s attractiveness as a fund domicile for increasingly sophisticated global capital. With its intentional focus on statutory ring-fencing, efficient administration, tax efficiency and now modernised liquidation pathways, the VCC is well positioned to remain a cornerstone of Singapore’s financial ecosystem.

As regulatory refinements continue and market participants accumulate further operational experience, the VCC framework is expected to support deeper innovation in fund structuring. This will inevitably attract more complex and cross-border investment strategies and reinforce Singapore’s reputation as a globally competitive and forward-thinking hub for asset management.