Malaysia announced several tax incentives to attract investments to the joint special economic zone [Johor-Singapore Special Economic Zone (JS-SEZ)] with Singapore today, 8 January 2025.

Jointly announced by the Johor state government and Malaysia’s Ministry of Finance, the incentives include special corporate tax rates of 5% for a duration of 15 years – which includes supply chains related to artificial intelligence and quantum computing, as well as the production of medical devices and aerospace components – and a special income tax rate of 15% for 10 years for eligible knowledge workers starting 1 January 2025.

“Building on the cooperation between Malaysia and Singapore, the incentive package for JS-SEZ will accelerate drawing in quality investments in key sectors and promote the creation of higher-income jobs, leveraging on the respective strengths and synergies between Johor and Singapore,” said Malaysia’s Finance Minister Amir Hamzah Azizan.

The incentives were announced one day after the official inauguration of the zone connecting the border area by the leaders of Singapore and Malaysia. The Johor-Singapore Special Economic Zone is almost double the size of Shenzhen, a city adjacent to Hong Kong, whose achievements Malaysia aspires to replicate with the SEZ. The initiative seeks to add USD 26 billion per year to the Malaysian economy by 2030.

The JS-SEZ spans an area of 3,571 square kilometers in southern Johor, extending from the eastern to the western coasts. This region, which is approximately four times larger than Singapore, will feature nine flagship zones designed to support various economic sectors: Johor Bahru City Centre, Iskandar Puteri, Forest City, Pengerang Integrated Petroleum Complex, Tanjung Pelepas-Tanjung Bin, Pasir Gudang, Senai-Skudai, Sedenak, and Desaru.