1. What a VCC is, and why it got so hot
The VCC (Variable Capital Company) is a fund structure Singapore introduced in 2020, often used as the vehicle for a family office. Flexible, private, tax-friendly — for a while it was the hot word in offshore circles. But beneath the hype, what you should really look at is the ledger — how much it costs to set up and maintain.
Whether a structure is good isn't about how glamorous it looks, but how much it takes from your pocket every year.
2. The setup threshold: money alone won't open it
Singapore's family-office thresholds (the 13O / 13U tax-exemption schemes) have been raised repeatedly in recent years:
- 13O: the asset-under-management threshold has risen to SGD 10 million (about RMB 53 million) to start, and must grow to SGD 20 million within two years.
- 13U: threshold starts at SGD 50 million (about RMB 260 million).
- It also requires hiring a local investment team, hitting a local-investment ratio, and filing compliance reports every year.
This isn't a toy for "affluent families" — it's an entry ticket for the "ultra-high-net-worth."
3. Ongoing cost: how much it burns a year
Take a VCC + family-office structure as an example. Annual fixed costs roughly include:
- Fund administration fees: SGD 30k–80k / year
- Audit and compliance: SGD 20k–50k / year
- Trustee and registered agent: SGD 10k–30k / year
- Local team payroll (minimum hiring requirement): hundreds of thousands of SGD / year
- Tax and legal advisors: depends on complexity
Rough math: a standard VCC family office running SGD 200k–300k (about RMB 1–1.5 million) a year in maintenance is the norm.
4. Compare it with Hong Kong insurance
Put the same money into a Hong Kong savings policy instead:
- No setup fee, no annual management fee
- No team to feed, no complex filings to make
- Assets still globalized, multi-currency, inheritable
For families whose asset level sits in the "few million to tens of millions" range, letting the money compound inside a Hong Kong policy beats burning hundreds of thousands a year on a structure — by far.
5. In closing
VCCs and family offices aren't bad — they serve the ultra-high-net-worth who genuinely clear the threshold. But for the vast majority of families, chasing "grand" structures too early only lets cost devour returns. Fill up the "low-cost main account" of Hong Kong insurance first; when your level truly rises, then consider upgrading the structure — that's the steady rhythm.