Recent migration and globalization trends have led to the emergence of ethnically, religiously, and linguistically diverse countries. Understanding the unfolding of social dynamics in multicultural contexts becomes a matter of common interest to promote national harmony and social cohesion among groups. The current functional magnetic resonance imaging (fMRI) study aimed to (i) explore the neural signature of the in-group bias in the multicultural context; and (ii) assess the relationship between the brain activity and people’s system-justifying ideologies. A sample of 43 (22 females) Chinese Singaporeans (M = 23.36; SD = 1.41) was recruited. All participants completed the Right Wing Authoritarianism Scale and Social Dominance Orientation Scale to assess their system-justifying ideologies. Subsequently, four types of visual stimuli were presented in an fMRI task: Chinese (in-group), Indian (typical out-group), Arabic (non-typical out-group), and Caucasian (non-typical out-group) faces. The right middle occipital gyrus and the right postcentral gyrus showed enhanced activity when participants were exposed to in-group (Chinese) rather than out-group (Arabic, Indian, and Caucasian) faces. Regions having a role in mentalization, empathetic resonance, and social cognition showed enhanced activity to Chinese (in-group) rather than Indian (typical out-group) faces. Similarly, regions typically involved in socioemotional and reward-related processing showed increased activation when participants were shown Chinese (in-group) rather than Arabic (non-typical out-group) faces. The neural activations in the right postcentral gyrus for in-group rather than out-group faces and in the right caudate in response to Chinese rather than Arabic faces were in a significant positive correlation with participants’ Right Wing Authoritarianism scores (p < 0.05). Furthermore, the activity in the right middle occipital gyrus for Chinese rather than out-group faces was in a significant negative correlation with participants’ Social Dominance Orientation scores (p < 0.05). Results are discussed by considering the typical role played by the activated brain regions in socioemotional processes as well as the role of familiarity to out-group faces.