Starting a financial services or fintech business in Singapore: key things foreign investors should know

Singapore’s financial sector holds significant importance, and is strictly regulated, attracting a considerable amount of foreign investment. The legal landscape is governed by acts such as the Payment Services Act, Securities and Futures Act, and the Financial Advisers Act. In terms of size and influence, the financial sector is a major contributor, accounting for about 14% of the country’s GDP and employing around 200,000 professionals.

By the close of 2025, the total assets managed under Singapore’s financial market is anticipated to reach S$6.7 trillion (US$5.2 trillion). When venturing into this market, it is essential for foreign investors to first ascertain the compatibility of their activities with Singapore’s regulatory framework, which will in turn impact the licensing requirements and the overall organization of the business.

The Payment Services Act 2019 (PSA) governs various payment-related activities such as money transfers, e-money issuance, and digital token services. Businesses operating in these areas are required to secure either a Standard or Major Payment Institution license, depending on the scale of their operations. On the other hand, investment activities, encompassing fund management and dealing in capital markets, are overseen by the Securities and Futures Act 2001 (SFA) and typically require a Capital Markets Services (CMS) license, unless specific exemptions apply.

Additionally, financial advisory services necessitate a license under the Financial Advisers Act 2001 (FAA).

Foreign investors seeking to establish regulated financial services in Singapore commonly opt for a subsidiary structure, which simplifies the licensing process. Branch offices are allowed for certain institutions, while representative offices are restricted to non-commercial activities. The capital requirements and prudential standards vary depending on the scope of financial services provided, influencing the prudence and feasibility of the investment. Ensuring proper licensing is crucial for compliance and a smooth entry into the market.