Mr. Zhou, who works in manufacturing, is attracted to Singapore’s tax incentives and strategic location and wants to set up a holding company there. He has heard that Chinese investment in Singapore’s fixed assets surged eightfold in 2025, and that regulations on outbound direct investment (ODI) will be significantly tightened in 2026, leaving him feeling uncertain.

Effective July 1, 2026, a new approach to overseas direct investment (ODI)—emphasizing “substance-based review, precise regulation, and thorough follow-up”—will be fully implemented. This article provides a comprehensive overview of the ODI pathway to Singapore, new policies for family offices, and structuring options. It is recommended reading for companies planning to expand overseas.

01

Why Singapore?

The data speaks for itself: According to the Singapore Economic Development Board’s (EDB) February 2026 annual report, mainland China’s fixed-asset investment in Singapore reached 2.93 billion Singapore dollars in 2025, surging approximately eightfold year-over-year and surpassing the United States for the first time to become the second-largest source of foreign investment. In the first quarter of 2026, fixed asset investment rose another 40.9%, with AI and the electronics industry serving as the core drivers.

Regulatory Framework: Singapore has signed double taxation avoidance agreements with more than 90 countries; under the China-Singapore DTA, the withholding tax on dividends for shareholdings of 25% or more is reduced from 10% to 5%; The corporate income tax rate is 17%, and newly established companies are eligible for tax exemptions or reductions on a portion of their profits for the first three years. With political stability and a robust rule of law, Singapore is the top choice for regional headquarters.

In a nutshell: Singapore is not synonymous with a “tax haven,” but rather a hub for expanding overseas operations based on “treaty-friendly conditions and substantive business operations.” Its value will continue to rise in 2026.

02

ODI Three-Piece Set Order

For companies expanding overseas, the legal process for transferring funds abroad involves three steps: “National Development and Reform Commission → Ministry of Commerce → State Administration of Foreign Exchange.” This sequence must not be reversed. Step 1: Filing or approval by the NDRC (approval is required for sensitive industries); Step 2: Obtaining the “Certificate of Overseas Investment by Enterprises” (the “ID card” for overseas investment) from the Ministry of Commerce; Step 3: Completing foreign exchange registration with a bank before purchasing and remitting foreign currency.

In February 2026, three departments jointly revised the regulations, stipulating that unreported overseas investments may result in the freezing of foreign exchange and a fine equal to the investment amount (5%-15%). Effective July 1, the overarching approach is to “examine substance, regulate with precision, and pursue cases to the end”: reviews have shifted from checking “whether documentation is complete” to verifying “whether projects are genuine and whether funds are lawful.”

Reminder: For individual shareholders who have not completed SPV registration under Document No. 37, the Ministry of Commerce has set a deadline. The corporate ODI channel and the individual Document No. 37 channel are not interchangeable; mixing the two or failing to complete the required procedures will result in delays in remittances.

If you’re facing a similar situation—wanting to set up a company or family office in Singapore but unsure about the ODI filing sequence and structure—we can help you with entity design and document preparation. Scan the QR code to contact Qicaiying’s online customer service (WeChat/Phone: 18620388671), and we’ll help you sort out this entire process from start to finish.

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03

What's the Most Stable Way to Set Up an Architecture?

Standard Approach: Domestic parent company → Hong Kong/Singapore holding company → Operating entity in the target country. Using a low-tax jurisdiction as a holding company does not mean it is a “shell” company; it must have genuine management and decision-making functions. Hong Kong: Profits Tax 8.25%–16.5%; no capital gains tax; Singapore: 17%, with an exemption for the first 300,000 Singapore dollars.

Singapore offers clear advantages as a destination for ODI investment: ACRA registration takes 1–3 business days, there is no minimum registered capital requirement, and at least one local director is required; information on the beneficial owner (BO) is inherently complete, with documentation more comprehensive than in the BVI or the Cayman Islands, making the filing process in China smoother.

Key Thresholds: The parent company must have positive net assets and net income, and the investment amount must not exceed 60% of its net assets. A situation where the “parent company is small but the subsidiary is large” will be immediately questioned. Profits repatriated from overseas companies must be registered as profit repatriations; otherwise, they will be classified as non-compliant cross-border flows.

04

Important Points to Note Regarding the New Family Office Policy

Singapore’s family office regulations will be tightened in 2026: The threshold for the 13O category will rise from 10 million Singapore dollars to 20 million Singapore dollars, and the threshold for the 13U category will rise from 50 million to 100 million, with a requirement to employ at least two professional investment staff locally in Singapore. New regulations under the SFO regulatory framework will take effect on June 15, 2026, and AUM will be calculated based on “designated investments.”

However, the commitment-based system remains in place: applicants are not required to have the full amount on hand at the time of application; approval can be granted in advance as long as they commit to meeting the requirements within two years. For families with a genuine, long-term investment intent, the door remains open; for shell companies seeking residency through “affiliation,” the door is closing.

Reminder: Setting up a family office does not mean “you can avoid taxes just by buying a shell company.” The Monetary Authority of Singapore (MAS) conducts substantive due diligence in advance on the source of funds, investment strategies, and contributions to Singapore’s real economy. The focus on substance over form is the baseline requirement for 2026.

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05

How to Sail Safely

First, file for registration before making capital contributions: Don’t transfer funds first and then try to retroactively submit the required documentation. Second, ensure a clear corporate structure: Use a Hong Kong or Singapore holding company combined with actual operations; do not use a shell company. Third, assess whether you meet the eligibility requirements: Only submit your application once you meet the criteria for net assets, net profit, and investment ratio.

Fourth, ongoing compliance: After obtaining the license, submit overseas business data on time and register with the local authorities abroad. Fifth, individual shareholders must comply with Document No. 37: Don’t let natural person shareholdings become a dead end.

In a nutshell: When expanding overseas in 2026, ODI is both a “hallmark of success” and a “shackle.” Only by treating it as the first step in your planning can your assets truly go global and your profits flow back home.

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