Singapore’s markets regulator has warned fund managers that popular investment structures introduced by the city-state six years ago to lure investors from offshore tax havens could be used for money laundering.
The cautious tone reflects a greater concern for illicit capital flows after the financial hub was rocked by several money-laundering scandals since the low-tax investment products were launched to great fanfare in 2020.
In a private briefing to industry participants in late January, the Monetary Authority of Singapore said the so-called variable capital company structure had proved very popular with hedge funds, private equity managers and family offices but cautioned over their use to transfer illicit funds, according to people with knowledge of the briefing.