Three jurisdictions dominate the fund domicile conversation for Asia-focused managers, and each signals something different before an LP/investor has read a single page of your deck. The Cayman Islands remains the global default, with the Cayman Islands Monetary Authority (CIMA) reporting over 30,000 registered funds as at Q3 2026. Singapore’s Variable Capital Company (VCC) has scaled past 1,300 registrations since its January 2020 launch. Hong Kong’s Open-ended Fund Company (OFC) has grown more gradually but now exceeds 791 registrations as of September 2026, backed by a government grant that has become a genuine point of differentiation as of 2026.
This guide compares the three head-to-head across structure, tax, treaty access, and cost, and sets out how the choice typically maps to a manager’s actual LP/investor base and strategy. It’s contributed to and reviewed by Joe Cheung, Managing Director, Ascentium Fiduciary Hong Kong.
Also see: Setting Up an Open-Ended Fund Company (OFC) in Hong Kong
What does each domicile actually offer?
Hong Kong’s OFC, established under Part IVA of the Securities and Futures Ordinance in 2018, is a corporate fund vehicle with variable capital and umbrella/sub-fund segregation, regulated jointly by the SFC and the Companies Registry. Its main draw for Asia-focused managers is proximity to Mainland China and Hong Kong’s own extensive network of Comprehensive Double Taxation Agreements (59 signed as at mid-2026), combined with a government grant that remains open through May 2027.
Singapore’s VCC, introduced under the VCC Act 2018 and launched in January 2020, offers a broadly comparable structure: a corporate vehicle with statutory ring-fencing between sub-funds under Section 29, regulated by the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA). Singapore’s pitch rests heavily on its 90-plus tax treaty network, a deep and mature fund services ecosystem, and the 13O, 13OA, and 13U tax exemption schemes, which were reset with tightened local spending and hiring conditions from 1 January 2025.
The Cayman Islands remains structured differently: managers typically use an Exempted Limited Partnership (ELP) for closed-end private equity and venture capital strategies, or a Segregated Portfolio Company (SPC) or standard exempted company for open-ended strategies, regulated by CIMA under the Mutual Funds Act and Private Funds Act. Cayman’s core appeal is tax neutrality. There are no direct taxes at the fund level, combined with decades of institutional familiarity and case law depth that Asian and onshore alternatives are still building toward.
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| Feature | Hong Kong OFC | Singapore VCC | Cayman (ELP / SPC) |
| Regulator | SFC + Companies Registry | MAS + ACRA | CIMA |
| Launched | 2018 | 2020 | Decades-established |
| Registrations | 765+ (mid-2026) | 1,400+ (mid-2026) | 30,000+ funds (Q1 2026) |
| Tax treaty network | 59 CDTAs signed | 90+ treaties | None (tax-neutral, no treaty network) |
| Government grant | Open until 9 May 2027 | Closed since 15 January 2025 | Not applicable |
| Direct taxation | Unified funds exemption; 0 percent on qualifying transactions | 13O/13OA/13U exemption schemes, subject to substance conditions | No direct taxes at fund level |
| Typical strategy fit | Open-ended funds, China-facing mandates | Open-ended funds, family offices, broadening PE/VC use | Closed-end PE/VC (ELP), multi-strategy hedge (SPC) |
Which domicile signals what to LP/investors?
Before an allocator gets to your track record, your domicile choice has already communicated something. Cayman conveys global familiarity and institutional muscle memory; decades of precedent make it the path of least resistance for US allocators, tax-exempt institutions, and fund-of-funds infrastructure built around it. Singapore’s VCC projects institutional discipline and onshore substance, which increasingly resonates with Asian sovereign wealth funds, Middle Eastern allocators, and European pension funds evaluating funds through an ESG and substance-conscious lens. Hong Kong’s OFC signals regional and China-facing commitment, a natural fit where the underlying investor base or investment thesis is itself anchored in Greater China.
None of these signals is universally “better.” They’re read differently depending on who’s reading them, which is exactly why the right domicile question is “what does my specific LP/investor base expect to see,” not “which jurisdiction is objectively strongest.”
Government grants: A real, and currently uneven, differentiator
This is one of the more concrete, less subjective differences between the three right now. Hong Kong’s Grant Scheme for OFCs and REITs, administered by the SFC, remains open for applications through 9 May 2027, covering 70 percent of eligible Hong Kong-based service provider expenses, capped at HK$300,000 for a public OFC and HK$150,000 for a private OFC.
Singapore’s equivalent VCC Grant Scheme has closed. After launching in 2020 and being extended once, with co-funding reduced from 70 percent to 30 percent of qualifying expenses, capped at S$30,000 per application, the scheme ended on 15 January 2025 and has not been renewed. Managers setting up a new VCC today do so without that cost offset, which currently gives Hong Kong a genuine cost-of-setup advantage it didn’t clearly have a few years ago. Cayman has never operated an equivalent grant, consistent with its lighter-touch, no-direct-tax model.
Tax treaty access: Where the real divergence is
For managers with meaningful onshore Asia exposure, including India, Indonesia, China, South Korea, and similar markets, treaty access isn’t a nice-to-have; it directly affects net returns through withholding tax on dividends, interest, and other outbound payments.
Cayman’s tax-neutral design means there’s no domestic tax to offset against a treaty in the first place; a Cayman vehicle investing into these markets generally suffers the full statutory withholding rate with no treaty relief available. Singapore’s 90-plus treaty network and Hong Kong’s 59 signed CDTAs both offer materially better withholding outcomes on qualifying structures, though the specific savings depend heavily on the target jurisdiction, income type, and whether beneficial ownership and substance conditions are satisfied. For funds concentrated in developed markets or raising primarily from US allocators indifferent to treaty access, this divergence matters far less.
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Singapore’s tax schemes got more flexible for closed-end funds in mid-2026. A MAS circular dated 31 July 2026 allows eligible closed-end funds, private equity, venture capital, and private credit to satisfy the minimum-asset entry condition for the 13O, 13OA, and 13U schemes based on committed capital rather than capital already deployed and removes the annual minimum-AUM retest once that entry condition is met. An umbrella VCC is now assessed as a single legal entity for this purpose rather than sub-fund by sub-fund, a genuinely manager-friendly change for multi-vintage PE and VC platforms.
Hong Kong’s OFC grant has room to run, with applications accepted through May 2027, giving managers currently weighing setup costs a longer runway than Singapore’s now-closed equivalent.
Cayman’s fund register continues to grow steadily, with CIMA’s Q1 2026 figures spanning roughly 13,000 open-ended mutual funds and nearly 18,000 closed-ended private funds, reinforcing that Cayman’s dominance, particularly for US-facing raises, hasn’t meaningfully eroded even as onshore Asian alternatives mature.
How should Asia-focused managers decide?
- Start with your actual LP/investor base, not a jurisdictional preference. US allocators and tax-exempt institutions still default to Cayman comfort; Asian sovereign wealth, Middle Eastern, and European pension capital increasingly rewards Singapore’s onshore narrative; investors anchored in Hong Kong or Greater China respond to an OFC.
- Match the vehicle to the strategy type. Cayman’s ELP remains the default for closed-end private equity and venture capital, though Singapore’s post-2025 committed-capital treatment for 13O/13OA/13U is narrowing that gap for PE and VC managers. Open-ended and multi-strategy funds tend to fit the OFC or VCC corporate structure more naturally than a Cayman partnership.
- Weigh treaty exposure against your underlying portfolio. If your strategy concentrates in markets with meaningful withholding tax on outbound payments, Singapore or Hong Kong’s treaty access is likely to matter more to net returns than Cayman’s tax neutrality alone.
- Factor in the grant timing while it lasts. With Singapore’s VCC grant closed and Hong Kong’s OFC grant open until May 2027, cost-conscious managers currently have a real, time-limited incentive to weight toward Hong Kong if the strategic fit is otherwise comparable.
- Consider using more than one domicile. It’s increasingly common for managers to run parallel structures, a Singapore VCC for a Southeast Asia mandate and a Hong Kong OFC for a China-facing strategy, for instance, rather than forcing every strategy into a single jurisdiction.
Where to next?
The domicile question has genuinely gotten more interesting over the past few years; Cayman is no longer the uncontested default, but it hasn’t been dethroned either, and Singapore’s and Hong Kong’s onshore alternatives have matured enough to be evaluated on their own merits rather than treated as second-best options. The right answer depends less on which jurisdiction is “winning” in aggregate registration numbers, and more on which one actually matches your LP/investor base, strategy, and portfolio’s tax exposure.
Frequently Asked Questions (FAQs)
Is Hong Kong’s OFC or Singapore’s VCC growing faster?
Singapore’s VCC has scaled faster in absolute terms, surpassing 1,400 registrations by mid-2026 against Hong Kong’s 765-plus, helped by an earlier launch, a deep service-provider ecosystem, and (until January 2025) an active grant scheme. That said, Hong Kong’s grant remains open while Singapore’s has closed, which may narrow the gap going forward.
Does Cayman still make sense for an Asia-focused fund?
Often, yes, particularly for closed-end private equity and venture capital strategies, and for managers raising primarily from US allocators or tax-exempt institutions who are more comfortable with Cayman’s established structures than with newer onshore alternatives.
Which domicile offers the best tax treaty access?
Singapore’s network of over 90 treaties is the broadest of the three, followed by Hong Kong’s 59 signed CDTAs. Cayman, by design, has no treaty network; its appeal rests on tax neutrality rather than treaty relief.
Can a manager use more than one fund domicile at once?
Yes, and it’s an increasingly common approach, using a Singapore VCC for one regional mandate and a Hong Kong OFC for a China-facing strategy, for example, to match each vehicle to the investor base and strategy it serves best.
Is the Hong Kong OFC grant still available?
Yes, as of this writing. The SFC-administered grant scheme covers 70 percent of eligible Hong Kong-based service provider expenses, capped at HK$300,000 for public OFCs and HK$150,000 for private OFCs, with applications accepted through 9 May 2027.
Why did Singapore’s VCC Grant Scheme close?
The scheme launched in 2020, was extended once with reduced co-funding through January 2025, and was not renewed further after that date. Managers incorporating a VCC today do so without the cost offset that was available to earlier entrants.
How Dezan Shira & Associates can help
Choosing a fund domicile is a strategic decision that shapes how allocators read your fund before they’ve reviewed a single return, and the right answer for a China-facing mandate looks different from the right answer for a Southeast Asia platform or a US-facing PE raise. Dezan Shira’s professionals help Asia-focused managers weigh Hong Kong, Singapore, and Cayman against their actual LP/investor base and strategy, and can coordinate parallel structures where that’s the better fit. Contact us for tailored support.
