AI businesses entering Singapore may be subject to different legal and licensing requirements depending on what their technology does, how it generates revenue and who uses it.
A regulatory analysis helps businesses identify these requirements early, structure their operations appropriately and avoid launching a product that may unintentionally fall within a regulated activity.
Regulatory considerations may arise for businesses offering:
The applicable laws will depend on the substance of the business model rather than how the service is described or marketed.
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KGP Legal LLC is a leading corporate and commercial law firm based in Singapore, with a strong international focus. As a member of the InterAsia Law Alliance, we provide seamless legal assistance in Singapore, Hong Kong, China, and Japan. Our integration within this network enables us to leverage extensive expertise and resources, ensuring comprehensive legal support across multiple jurisdictions.
An AI platform that provides investment recommendations, research or access to financial products may fall within the Financial Advisers Act or Securities and Futures Act. The business may need to determine whether a licence is required or whether an exclusion or exemption is available.
An AI business may fall within the Payment Services Act 2019 if it is classified as a payment gateway, facilitates domestic or cross-border money transfer, has elements of a remittance business, merchant acquisition, e-money issuance or DPT services. A payment services licence may be required unless an exclusion or exemption is applicable.
AI businesses must consider how personal data is collected, used to train or improve AI systems, shared with service providers and transferred across borders. The Personal Data Protection Act applies alongside the PDPC’s specific guidance for AI recommendation, decision-making and generative AI systems.
Singapore has also introduced governance frameworks for generative and agentic AI, covering matters such as accountability, transparency, testing and human oversight.
Claims concerning an AI product’s accuracy, performance or capabilities should be clear and supportable. Businesses should also consider how AI-generated content, recommendations, reviews and automated sales processes may affect their obligations under consumer protection and fair-trading laws.
Platforms involving paid credits, prizes or predictions may require analysis under the Gambling Control Act. The legal position will depend on how users participate, whether anything of value is staked and how rewards or outcomes are determined.
Businesses should confirm that they have the necessary rights to use training data, software, models and third-party content. Their customer and supplier agreements should also address ownership of AI-generated outputs, confidential information and improvements to the technology.
AI systems may create additional risks involving data leakage, unauthorised access, manipulated inputs and unreliable outputs. Appropriate security, testing and incident-response measures should be established throughout the AI system’s lifecycle.
Additional regulations may apply where AI is used in financial services, healthcare, employment, insurance, education or other regulated industries. Businesses should assess both the AI technology and the underlying service being provided.
KGP Legal assists AI companies with:
Singapore requirements may apply where the business operates from Singapore, offers services to users here or collects and processes personal data connected with Singapore.
No. The applicable framework generally depends on the AI system’s functions, the industry in which it operates and the existing laws governing the underlying activity.
Potentially. This will depend on the nature of its outputs, whether recommendations relate to investment products and how the information is presented and distributed.
Not necessarily. The regulator may consider the actual substance and operation of the service rather than relying solely on disclaimers or labels used by the business.