[O-SG] Early-October News Highlights: Singapore Issues Guidelines on AI Risk Management, Financial Institutions to Comply in Phases | Capital Gains on IP Transfers Not Taxable, Certain Charges Remain

I. Finance

1.1 Singapore Issues Guidelines on AI Risk Management; Financial Institutions to Comply in Phases

On 7 October 2026, the Monetary Authority of Singapore (MAS) issued its Guidelines on Artificial Intelligence Risk Management, setting out its supervisory expectations for financial institutions' use of AI. The Guidelines cover governance and oversight, key risk management policies and processes, controls across the full AI lifecycle, and capabilities and resourcing. They are designed to operate alongside existing laws and the principles of fairness, ethics, accountability and transparency, and apply to locally-incorporated financial institutions under MAS's consolidated supervision.

The Guidelines define AI as machine-based systems or models that generate predictions, content or decisions based on learned premises; purely rule-based tools fall outside their scope. Financial institutions are expected to implement the Guidelines in a manner proportionate to their scale and risk. To address the financial, operational, conduct, privacy and third-party risks amplified by generative AI and AI agents, the Guidelines require mechanisms for the identification, inventory management and materiality assessment of AI risks, together with controls over data governance, explainability and human oversight.

The Guidelines take effect on 7 October 2027. From that date, financial institutions must meet the requirements in the chapters on governance and oversight and on key risk management policies, with the remaining chapters on lifecycle controls and capabilities to be met by 7 October 2028 at the latest. MAS said it will update the Guidelines from time to time in line with technological developments.

1.2 Private Banking Clients' Assets in Singapore Up About 50% Over Five Years

Deputy Prime Minister and MAS Chairman Gan Kim Yong said on 5 October that, over the past five years, the assets of private banking clients in Singapore have grown by about 50%, with a 15% increase from 2024 to 2025. Geopolitical shifts, the development of AI and a new generation's approach to wealth management are reshaping trade, investment and wealth allocation.

To improve the account-opening experience, MAS is working with the Private Banking Industry Group (PBIG) to promote the use of AI and digital tools, assess clients' sources of wealth on a risk basis, and strengthen practitioner training. The group has committed to shortening the median account-opening time at member banks to within one month by the end of 2026; over the past three months, nearly half of the new accounts opened at member banks were completed within one month.

MAS is reviewing the fund tax incentive framework and considering feedback from single family offices on investment flexibility and capital allocation, including investments such as digital payment tokens and insurance policies. The review will involve updating the "Designated Investment List," which sets out the categories of investments eligible for tax exemption under the fund tax incentive schemes; details of the updates and their implementation date will be announced in due course.

1.3 MAS Keeps Monetary Policy Unchanged; Core Inflation to Stay Elevated in the Near Term

On 14 October 2026, MAS issued its Monetary Policy Statement, deciding to keep unchanged the rate of appreciation of the policy band for the Singapore dollar nominal effective exchange rate (S$NEER), with no change to the width of the band or the level at which it is centred. Having slightly raised the pace of appreciation in July, MAS noted that the Singapore dollar has since strengthened modestly in the upper half of the policy band.

On the economy, activity among Singapore's major trading partners has remained resilient, global AI-related investment has continued to support industrial production and trade, and the impact of rising energy costs has so far been contained through the drawdown of inventories and supportive fiscal measures. Official data show that GDP grew 5.4% year-on-year in the third quarter of 2026, and 1.1% quarter-on-quarter on a seasonally adjusted basis, led mainly by the technology sector, with resilient activity in construction, financial services and real estate.

On inflation, core inflation rose to 2.1% year-on-year in July–August, up from 1.5% in the second quarter, driven mainly by the pass-through of import costs to a broader range of goods and services, higher electricity and gas tariffs, and still-elevated transport services inflation. Over the same period, food inflation rose from 1.9% to 2.2%, largely as accumulated cost increases were passed through to consumer prices; services inflation came in below expectations, reflecting enhanced government healthcare subsidies and intensifying price competition in telecommunications services.

1.4 Public Agencies Not Required to Take Up Commercial Cyber Insurance; Dispute Resolution Centre Able to Handle Claims

On 7 October 2026, MAS published an oral reply to a parliamentary question on commercial cyber insurance. MP Yip Hon Weng had asked whether public-sector and statutory bodies are required to purchase commercial cyber insurance, whether MAS tracks industry claims and payout trends, and whether the Financial Industry Disputes Resolution Centre (FIDReC) is able to handle related disputes.

In its reply, MAS noted that public-sector agencies, including statutory boards, are not required to purchase commercial cyber insurance. The Government manages cyber risk in multiple ways, including by committing resources to strengthen capabilities in risk prevention, detection, response and recovery.

MAS said that businesses' acceptance of cyber insurance as a risk management tool has increased in Singapore and the region. MAS continues to monitor developments through engagement with the industry, so as to support the sound development of the market. FIDReC's adjudicators have the expertise to handle disputes involving consumers and small businesses in the financial sector and are trained regularly to stay abreast of emerging issues and industry developments; the centre has also handled cyber insurance claim disputes in recent years.

1.5 MAS Strengthens Regulation of Public Solicitation; New Rules to Take Effect in 2027

On 12 October 2026, MAS announced enhanced measures to regulate public solicitation activities, following an earlier public consultation on raising conduct standards in this area. Public solicitation refers to financial institutions and their representatives promoting financial products and services in public places through means such as roadshows; if not properly conducted, it can expose consumers to unsolicited or persistent, high-pressure selling.

Under the new measures, financial institutions may only carry out solicitation within designated areas of commercial premises, and must appoint suitably qualified personnel to supervise the on-site conduct of their representatives. Representatives must, at the outset of an approach, clearly inform consumers of their intent to market financial products or services, and may only proceed with the pitch after obtaining the consumer's consent. Street canvassing and door-to-door selling remain prohibited.

MAS said it will incorporate these measures into its revised Guidelines on Standards of Conduct for Marketing and Distribution Activities, to be issued in 2027, when financial institutions will be given a nine-month transition period to make the necessary changes. The move complements the online advertising rules introduced in September 2025, further clarifying that institutions should treat consumers responsibly.

II. Tax

1.1 Singapore Issues Deduction Rules for Green Certificates and Green Credits; Effective 8 October

On 7 October 2026, Singapore's Ministry of Finance issued the Income Tax (Deduction for Expenditure on Green Certificates and Green Credits) Rules 2026. Made under Section 7(1) of the Income Tax Act 1947, the Rules were signed by Ms Ngiam Siew Ying, Second Permanent Secretary (Finance), on 2 October and take effect on 8 October.

The Rules specify that renewable energy certificates and carbon credits are, respectively, designated green certificates and green credits. A renewable energy certificate refers to a certificate representing ownership of the environmental, social or other non-power attributes of a unit of electricity that is generated from renewable energy (whether within or outside Singapore) and supplied within Singapore. Carbon credits include instruments representing greenhouse gas emission reductions or removals, emission allowances, and instruments used to meet emissions-related tax or regulatory obligations.

The Rules will be presented to Parliament. Under the Rules, a company's expenditure on purchasing designated green certificates or carbon credits may qualify for an income tax deduction as prescribed. The Rules are aligned with the definitions of greenhouse gases and carbon credits under the Carbon Pricing Act 2018, and are intended to use tax incentives to encourage companies to invest in green energy and carbon-reduction projects.

1.2 Capital Gains on IP Transfers Not Taxable; Certain Charges Remain Subject to Tax

On 1 October 2026, the Inland Revenue Authority of Singapore (IRAS) published Advance Ruling Summary No. 17/2026, addressing whether gains from the transfer of intellectual property rights (IPR) in an intra-group reorganisation are taxable under Section 10(1) of the Income Tax Act 1947. The ruling concerns two group companies: Company A, which is responsible for the business outside the Asia-Pacific region, and Company B, the Asia-Pacific business entity, which carries out the relevant manufacturing, marketing and R&D functions and derives income from product sales and IP licensing.

Under the ruling, Company A proposes to buy back from Company B, at market value, the IPR relating to the Asia-Pacific region, including IPR for which five-year writing-down deductions had been claimed under Section 19B, as well as other IPR for which no such deduction had been claimed or whose R&D expenditure had already received a tax deduction. IRAS determined that the transfer is capital in nature, so the resulting gains are not taxable and any losses are not deductible. However, for IPR to which Section 19B applies, a clawback is to be computed on the lower of the transfer price and the capital expenditure incurred on acquisition, and taxed in the Year of Assessment corresponding to the basis period in which the transfer takes place.

IRAS noted that this treatment took into account the nature of Company B's business after it acquired the IPR, the context of the intra-group reorganisation, and the arrangement under which, following the transfer, Company B will no longer own the IPR or serve as the Asia-Pacific business hub and will ultimately become a dormant company. The Section 19B clawback applies under subsection (5) of that section and is subject to subsection (10J). The ruling is binding only on the applicant and the specific transaction concerned; other taxpayers should not assume that similar transactions will necessarily receive the same tax treatment.

1.3 IRAS Clarifies the Tax Characterisation of Preference Shares; Qualifying Dividends May Be Tax-Exempt

On 1 October 2026, IRAS published Advance Ruling Summary No. 16/2026, clarifying the income tax treatment of redeemable, non-convertible, non-cumulative, participating and non-voting preference shares. The ruling concerns whether, after Singapore Company A issues such preference shares to a subscriber, they should be characterised as an equity instrument for Singapore income tax purposes, and whether dividends subsequently received by the subscriber can enjoy tax exemption.

According to the summary, Company A and the subscribers, Company B and Company C, are all incorporated in Singapore and are Singapore tax residents engaged primarily in investment holding; B and C are also shareholders of A. The preference shares have no maturity date and are redeemable only at Company A's discretion; dividends are payable at the company's discretion, only out of distributable profits, and are non-cumulative. On liquidation, the preference shares rank pari passu with ordinary shares and are entitled to participate in surplus profits and assets; holders generally have no voting rights and must transfer the shares together with ordinary shares.

IRAS ruled that the preference shares are an equity instrument for Singapore income tax purposes, and that the related distributions should be treated as dividends. As the dividends are paid by a Singapore tax resident company, the dividends received by the subscriber may be exempt from tax under Section 13(1)(za) of the Income Tax Act 1947. IRAS also reminded that an advance ruling summary is binding only on the applicant and the specific transaction concerned; other taxpayers should not assume that similar transactions will necessarily receive the same tax treatment.

III. Others

1.1 EnterpriseSG to Invest S$120 Million Over Five Years to Support SME Innovation

Enterprise Singapore (EnterpriseSG) has announced that, over the next five years, it will invest up to S$120 million to strengthen its network of Centres of Innovation, supporting SMEs in developing new products and bringing them to market. On 7 October, EnterpriseSG said it will consolidate the Centres of Innovation from 27 to 10, and take over the technology scouting and matching services previously provided by IPI Singapore (Intellectual Property Intermediary, IPI), so as to simplify SMEs' access to support.

Following the consolidation, IPI will cease operations on 31 March 2027. EnterpriseSG said it is working to redeploy affected IPI staff to the strengthened Centres of Innovation, the public service and the broader innovation ecosystem. All staff at the affected Centres of Innovation are on fixed-term contracts tied to project completion, and the authorities will offer them positions at institutes of higher learning to complete ongoing projects or take on other suitable roles.

The authorities noted that, as innovation grows more complex, SMEs increasingly need expertise spanning different players and parts of the ecosystem. The investment will enhance the Centres of Innovation across four areas: technology scouting, technology adoption, ecosystem connections, and outreach and industry engagement.

1.2 MNCs Team Up with Singapore Enterprises to Expand Across Asia: Collaboration Dividends Gathering Pace

The Singapore Economic Development Board (EDB) has noted that collaboration between multinational corporations (MNCs) and local enterprises helps build corporate capabilities, strengthen supply chain resilience and expand into overseas markets. In the first half of 2026, global companies including Viatris, Maersk, Mindray, Revolut, NVIDIA and Quantinuum expanded or newly established operations in Singapore. Singapore is home to about 370,000 SMEs, around 4,500 tech start-ups, and a research network that includes 78 public research institutions, providing support for MNCs to collaborate with local partners.

A study released by Singapore's Ministry of Trade and Industry in November 2025 showed that greater exposure to EDB-supported firms helps improve the performance of unrelated local firms. A 10% increase in exposure was associated with an 8.3% increase in average value added, a 6.2% increase in value added per worker, a 1.5% increase in local employment, and a 1.6% increase in wages for local workers at non-EDB firms. EDB and EnterpriseSG facilitate such partnerships and share part of the collaboration costs through measures such as business matching, pilot projects and the Partnerships for Capability Transformation (PACT) programme.

Collaboration has already borne fruit across multiple areas: Pratt & Whitney Component Solutions (PWCS) built up electroplating capabilities together with local firm ATCT; Sanofi and local deep-tech firm Magorium turned recycled insulin pens into materials used to pave 1.5 km of road; and precision engineering firm Fong's, connected to Stryker through EDB, transitioned into high-end medical device manufacturing. Such collaboration both strengthens supply chain resilience and helps local enterprises expand their markets.

1.3 Singapore to Build a Digital Bunkering Data Ecosystem; Multiple Pathways to Advance Low-Carbon Marine Fuels

Singapore will build a digital ship-bunkering data ecosystem that captures bunkering data at source and transmits it, in an end-to-end secure manner, to parties across the value chain such as the Maritime and Port Authority of Singapore, traders and financiers, reducing intermediate steps and enhancing transaction integrity. Senior Minister of State for Transport Murali Pillai announced the move on 14 October at the 24th Singapore International Bunkering Conference (SIBCON), against the backdrop of Singapore's goal of achieving net-zero greenhouse gas emissions by 2050.

The system forms the second phase of the digital bunkering initiative, building on the first phase's digitalisation of electronic bunker delivery notes. Since 1 April 2025, all fuel suppliers in the Port of Singapore have been required to provide digital bunkering services. The Maritime and Port Authority will launch a call for funding proposals in November to support the second-phase pilot, in which licensed bunker tanker operators may participate in partnership with technology providers.

Singapore is also advancing a multi-fuel strategy, exploring the use of liquefied biomethane as a marine fuel, developing ammonia as a fuel and conducting its first ethanol bunkering trial. LNG bunkering sales hit a record 570,000 tonnes in 2025, and rose 24% year-on-year in the first eight months of 2026.

1.4 Singapore Tightens Rules on Online Sales of Mobility Devices, Strengthening Battery Safety Oversight

On 7 October, Singapore's Parliament passed the Land Transport and Related Matters Bill, prohibiting the online sale and advertising of non-compliant active mobility devices and requiring sellers to post rules and warning notices on product pages. The rules will take effect in the second quarter of 2027 and apply to online listings and advertisements that originate from Singapore, or are posted by Singapore-linked persons, and are accessible in the country.

The Ministry of Transport said there were 49 fires caused by active mobility devices locally in 2025, and the new Bill therefore prohibits the use of non-compliant batteries on power-assisted bicycles, electric personal mobility devices and personal mobility aids. The Land Transport Authority may require sellers to amend or take down non-compliant content; overseas sellers with no presence in Singapore fall outside its jurisdiction and will instead be addressed through import-stage checks to reduce fire hazards.

The Bill was passed following debate by Members of Parliament, and also establishes a regulatory sandbox for autonomous vehicles. The authorities expect only a few hundred autonomous vehicles to be on the roads by the end of 2028 — far below the current pool of about 72,000 taxi and private-hire drivers — so there will be no immediate impact on drivers' employment in the near term.

1.5 Singapore Releases New Cybersecurity Strategy, Stepping Up Efforts Against Emerging Cyber Threats

On 13 October, Singapore unveiled a new version of the Singapore Cybersecurity Strategy. Speaking at the opening of Singapore International Cyber Week, Senior Minister and Coordinating Minister for National Security and Minister for Home Affairs K. Shanmugam said a major shift in the new strategy is the adoption of a more proactive approach to cyber defence — seeking to detect and block cyber threats earlier, with the focus shifting from after-the-fact response to continuous defence.

The Government has set up a National Cybersecurity Command Centre to serve as the operational hub for national cyber defence, strengthening defences by continuously monitoring critical information infrastructure, integrating threat intelligence from multiple sources, and deploying AI-driven coordination systems. It is also developing a national protective DNS service that blocks connections before threats reach users, reducing risks such as phishing, scams and malware.

Beyond national cyber defence, the new strategy also covers strengthening the security of critical infrastructure and cyberspace as a whole, enhancing capabilities to deal with AI and quantum technology, deepening international cooperation and nurturing cybersecurity talent. The Singapore Cybersecurity Strategy was first launched in 2016 and updated in 2021; the new version builds on the past decade to strengthen the country's ability to address emerging challenges.

ABOUT ESTAR

As an international financial and tax service provider certified by the Accounting and Corporate Regulatory Authority (ACRA) and the Singapore Chartered Tax Professionals (SCTP), we focus on providing Chinese entities with full-cycle back-office support solutions for going global in Singapore, offering one-stop cross-border services to safeguard Chinese entities from strategic planning to operational implementation.

DISCLAIMER

Any content published on this website that is marked with a heading such as "News" is sourced from the internet. It has been compiled and organised by the editor for the purpose of sharing and exchange. If there is any infringement, please contact the editor for amendment or removal. Thank you!

RECOMMENDED LINKAGES

◎[Q] Summary of FAQs and Replies for Existing Company in Singapore

◎[SG] Existing Company Promo Pack

◎[SG] List of Fees – Secretary | Finance (Accounting & Report) | Tax | Others