Are Singapore unit trusts, SGX ETFs and robo-advisers PFICs?
Short answer: Yes. Almost every non-US pooled investment available in Singapore — unit trusts, SGX-listed ETFs, investment-linked policies and robo-adviser portfolios built from non-US funds — is a Passive Foreign Investment Company for US taxpayers. Each requires Form 8621 and, by default, punitive tax on gains. US taxpayers generally hold US-domiciled funds instead.
Written and reviewed by Anthony Walsh, Selanis. Last reviewed 2026-10-06.
Why it works this way
A foreign company is a PFIC if most of its income is passive or most of its assets produce passive income. A fund is designed to do exactly that, so nearly every foreign fund qualifies.
Under the default excess-distribution regime, gains are spread over the holding period, taxed at the top ordinary rate for each year and charged interest. The result can exceed the gain.
Individual Singapore shares (for example DBS or Singtel) are generally not PFICs because they are operating companies, which is why direct shares and US-domiciled funds are the usual building blocks for Americans in Singapore.
The expensive mistake: Buying an ILP from a local adviser
Investment-linked policies wrap PFIC funds inside an insurance contract with high fees and long lock-ups. They are among the most expensive products an American in Singapore can own.
What to do
- List every pooled holding — Include CPF Investment Scheme and SRS investments.
- Decide on an exit or election — Work out the cost of selling against making a QEF or mark-to-market election where available.
- Rebuild in US-domiciled funds — Use a custodian that serves Singapore-resident Americans.