Ireland is among the good examples of introducing the VCC legal form, which has had an extremely positive impact on business.
As of December 2024, it is now possible to register Variable Capital Companies (VCCs) in Bulgaria—a legal structure that provides greater flexibility in capital management and investment attraction. VCCs allow companies to dynamically increase or decrease their capital without the need for complex procedures to amend the articles of association or incur additional administrative costs. This mechanism is especially useful for investment funds, startups, and companies seeking efficient solutions for capital mobility.
Variable Capital Companies, under various names, are widely used across the European Union, particularly in countries with developed financial and investment sectors. In economies where VCCs have been implemented, an increase in international investment has been observed.
VCCs in Key European Countries
- Luxembourg – Société d’Investissement à Capital Variable (SICAV) is a popular form of VCC, primarily used for collective investment schemes. Luxembourg, as one of Europe’s leading financial centers, registered its first SICAV back in the 1960s.
- Ireland – Investment companies with variable capital are a core part of the country’s financial ecosystem. They play a significant role in the collective asset management sector.
- France – The first country to introduce VCCs, creating SICAVs for collective investment schemes in 1947. By the end of 2020, France had over 3,500 SICAV funds managing significant assets.
- Other European countries – VCCs also exist in Malta, Italy, Germany, Austria, Spain, Belgium, Greece, and others, all of which have established legal frameworks for flexible capital management.
VCCs Outside of Europe
- Singapore – In 2020, Singapore introduced Variable Capital Companies (VCCs) as a new legal structure for funds. Over 300 VCCs were registered in the first year alone, solidifying Singapore’s position as a leading financial hub.
- USA, UK, Switzerland, Hong Kong, Australia, Japan, South Korea, and Canada – These countries apply various forms of variable capital structures, offering a high degree of flexibility for investment funds and corporate entities.
VCCs in Countries Without an Established Legal Framework
Countries such as Romania, Hungary, Slovenia, Croatia, Slovakia, the Czech Republic, Poland, Lithuania, Latvia, and Estonia have not yet introduced a specific legal form equivalent to Variable Capital Companies (VCCs). Nevertheless, these countries offer various alternatives for flexible capital management and investment attraction.
The introduction of VCCs in Bulgaria places the country among those with a modern legal framework that facilitates a more investment-friendly environment. This step could have a positive impact on attracting capital and developing the fund industry, particularly among international investors.
You can learn more about VCCs in our article: “7 Good Reasons to Establish a Variable Capital Company (VCC) Instead of an LLC or JSC (with Examples from Our Practice)”
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