Around 11 per cent of Singapore firms are using the yuan to settle their cross-border transactions, according to a survey from HSBC.
In Hong Kong, the figure is 50 per cent and 30 per cent in China.
The survey also found that 53 per cent of Chinese businesses surveyed would offer discounts of up to 5 per cent for transactions settled in yuan.
Joseph Arena, HSBC's Head of Global Trade and Receivables Finance, Singapore, said: "Businesses in Singapore are facing high labour and fixed costs. A 5 per cent discount could represent significant cost savings for Singapore companies."
But the understanding of the currency's benefits is still limited, with 61 per cent of Singapore companies surveyed saying that they were unfamiliar with the yuan's internationalisation.
Industrial and Commercial Bank of China was appointed as a yuan clearing bank in Singapore in May.