How Will Singapore–China RMB & Capital Market Initiatives Impact Your Banking, Tax and Accounting Strategy for 2026? (Updated Dec 2025)

Why are Singapore–China RMB and capital-market initiatives suddenly a 2026 planning issue?

In December 2025, Singapore and China announced new RMB and capital-market initiatives that can directly change how Singapore-based businesses receive, hold, pay, invest, and report China-linked funds in 2026. Key developments include DBS being authorised as Singapore’s second RMB clearing bank, an over-the-counter (OTC) bond market arrangement giving institutional access to selected products on China’s Interbank Bond Market via designated banks in Singapore, and a digital RMB (e-CNY) pilot for Singapore travellers.

For SMEs and groups with China customers, suppliers, staff travel, RMB balances, or China investments, these initiatives can affect:

• Banking operations: RMB collections, RMB liquidity, and treasury options
• FX risk & pricing: how you quote and settle cross-border transactions
• Accounting treatment: FX translation, hedge documentation, fair value measurement
• Tax outcomes: deductibility, taxable FX gains, transfer pricing support, and documentation readiness

What changed in December 2025 that business owners should actually care about?

Here are the developments that matter most for 2026 planning:

1) Why does a second RMB clearing bank in Singapore matter?

China’s central bank announced the authorisation of DBS Bank as an RMB clearing bank in Singapore, pursuant to PBOC–MAS cooperation. Reuters also reported DBS’ appointment as Singapore’s second RMB clearing bank (with ICBC Singapore having been the first, appointed in 2013).

Practical business impact (2026):

• Potentially more competitive RMB clearing and liquidity options in Singapore
• More room for corporates to design RMB settlement workflows (collections, payments, pooling, sweeps) depending on their banks and counterparties
• Easier scaling if you’re increasing RMB invoicing for China trade

2) What is the OTC bond market arrangement and why does it matter?

Reuters reported that Singapore and China agreed to commence an “over-the-counter” bond market arrangement, enabling designated banks in Singapore to provide institutional investors access to selected fixed income products on China’s Interbank Bond Market. DBS also stated it received approval to operate in the onshore OTC bond market.

Practical business impact (2026):

• Groups with treasury investing may gain additional pathways to China fixed-income exposure (subject to eligibility and bank onboarding)
• This increases the importance of getting your investment accounting, fair value approach, and tax position aligned before executing

3) What is the e-CNY (digital RMB) pilot and what does it change?

Reuters reported a pilot that allows travellers from Singapore to open and top up digital RMB wallets for merchant payments in China (via ICBC and Bank of China Singapore branches).

Practical business impact (2026):

• If your team travels frequently, you may need clearer expense policies (what’s reimbursable, what exchange rate applies, what evidence is required)
• Some companies will update their employee claims workflow to avoid “messy FX” in reimbursements

How Should SMEs Update Banking and Treasury Workflows for 2026?

What Should You Review First in Your Bank Setup?

Before making any strategic changes, SMEs should conduct a practical review of their existing banking and treasury arrangements. Key areas to assess include:

• Which currencies you invoice in (SGD, USD, or RMB) and the commercial rationale behind each choice
• Where RMB funds are received, including which legal entity, bank account, and banking partner is used
• How RMB is converted, whether through spot conversion, forward contracts, or natural hedging
• Who approves foreign exchange transactions and how the business purpose of each trade is documented

This review helps identify exposure points that may become more material as RMB usage increases in 2026.

What Are “Quick Wins” for RMB Operational Control?

SMEs do not need complex treasury structures to improve control. Practical, low-friction steps include:

• Creating a simple RMB cash management policy, such as:
  • Hold up to X months of RMB operating needs
  • Convert balances above a defined threshold
  • Hedge exposures that exceed a set risk limit
• Defining a consistent FX rate source for invoicing, expense claims, and accounting entries
• Setting up monthly FX exposure reporting, even if it is a one-page internal dashboard

These measures improve visibility, consistency, and audit readiness without adding unnecessary complexity.

What Are the Most Common Accounting Impacts You’ll See in 2026?

1) How Will Foreign Currency Accounting Show Up More Often?

As RMB transactions increase, finance teams should expect more frequent foreign currency effects in the accounts, including:

• Realised FX gains or losses upon settlement
• Unrealised FX remeasurement differences at month-end or year-end for RMB balances
• Greater scrutiny on cut-off accuracy and supporting documents, such as contracts, invoices, and bank advices

Strong month-end procedures become increasingly important as currency exposure grows.

2) If You Use Hedging, What Changes?

Businesses that start using forwards or options to manage RMB exposure must ensure their accounting and controls are aligned. Key considerations include:

• Clear documentation of the hedge relationship, risk management objective, and effectiveness approach
• Alignment between treasury activity and finance reporting controls, so transactions are consistently reflected in the accounts

Without proper documentation, hedging activities can increase reporting complexity rather than reduce risk.

3) If You Invest Into China Fixed Income, What Gets Harder?

Introducing capital market instruments adds a new layer of accounting complexity. Finance teams commonly face challenges around:

• Classification and measurement, such as cost versus fair value
• Availability and reliability of valuation evidence and pricing sources
• Ensuring complete disclosures, including risk exposure, concentration, and valuation methods

Early alignment between treasury, finance, and advisors helps avoid year-end surprises.

What Tax Planning Areas Should You Stress-Test for 2026?

(General guidance only; positions should always be assessed based on specific facts.)

1) Will More RMB Settlement Change Your Taxable Profits?

RMB settlement can affect both the timing and size of taxable income, particularly because:

• FX gains and losses may become more frequent
• Pricing strategies may shift, especially when moving from USD to RMB invoicing

Tax readiness improves when your business can clearly explain:

• Why RMB was chosen over other settlement currencies
• How prices were set and adjusted
• How FX movements were managed, or why they were not hedged

2) What Transfer Pricing Angle Is Often Overlooked?

For businesses with cross-border related-party transactions, currency and treasury decisions can affect:

• Comparability in pricing benchmarks
• Intercompany funding structures, including who bears FX risk
• Documentation expectations, such as policies, agreements, and internal approvals

These areas are often reviewed together during tax audits and should be consistent.

3) What About Withholding Tax and Cross-Border Payments?

When paying China-based vendors for services, royalties, or technical fees, businesses should ensure:

• Payments are classified correctly based on their nature
• Supporting documents remain consistent, including contracts, invoices, and evidence of services rendered
• Trade settlement currency decisions are not confused with tax characterisation of payments

Clear documentation reduces the risk of disputes or reassessments.

How Should You Turn These Changes Into a Simple 2026 Action Plan?

What Is the 30–60–90 Day Plan for SMEs?

Next 30 Days: Foundation

• Map all China-linked flows, including customer receipts, supplier payments, and intercompany charges
• Identify where RMB currently appears across invoices, bank accounts, and expense claims

Next 60 Days: Controls and Reporting

• Implement an FX policy and approval matrix
• Decide on consistent FX rate sources for invoicing, revaluation, and claims
• Build a monthly RMB exposure and FX gain/loss summary for management

Next 90 Days: Tax and Audit Readiness

• Align accounting treatment for FX transactions and any hedging activities
• Review tax support files for major cross-border flows
• If investing, confirm classification approaches and valuation evidence standards

Why Should You Plan This With Paul Hype Page & Co. for 2026?

At Paul Hype Page & Co., we support businesses that need their banking operations, accounting, and tax compliance to remain aligned as cross-border activity increases. Our services span incorporation, accounting, tax advisory, and corporate secretarial support across Singapore and the region, supported by our digital platform Tantoo.io to streamline documentation and compliance workflows.

If your 2026 strategy includes increased RMB settlement, China-linked investments, or cross-border restructuring, working with one integrated advisory team helps ensure that operational decisions remain consistent with accounting and tax requirements.