Johor-Singapore Special Economic Zone
The Johor-Singapore Special Economic Zone (JS-SEZ) was officially launched on 7 January 2025. This initiative aims to harness the strengths of both Johor and Singapore to unlock greater economic potential. By combining Malaysia’s land and labour resources with Singapore’s financial expertise, the JS-SEZ is designed to deliver mutual economic benefits.
Key features and objectives of JS-SEZ:
- Attract high-value investments
- Promote economic integration between Malaysia and Singapore
- Facilitate the movement of goods and people across borders
- Establish flagship development zones to drive strategic growth
- Create job opportunities, especially in high-skilled sector
Located in southern Johor, the JS-SEZ consists of nine flagship zones, each offering customised tax incentives and support for investments across various promoted sectors, including logistics, manufacturing, digital economy, tourism, and green energy. Tax incentives are available based on the flagship areas. Applications are to be made by 31 December 2034.
A & B: Johor Bahru Waterfront & Iskandar Puteri
Global Services Hub
Income tax rate of 5% for 15 years.
C: Tanjung Pelepas
Smart Logistics Complex
Investment Tax Allowance (ITA) of 100% on qualifying expenditure (QE) incurred within five years, set-off against 100% of statutory income (SI).
D: Tanjung Langsat – Kong-Kong
Manufacturing of downstream specialty chemicals
- Income tax rate of 5% or 10% for a period of 5 years + 5 years, or
- ITA of 100% or 60% on QE incurred for 5 years + 5 years, set-off against 100% of SI.
E: Senai-Skudai
(Aerospace manufacturing, and maintenance, repair and overhaul services)
New company
- Income tax rate of 5% for 15 years (capital investment above RM1 billion).
- Income tax rate of 5% for 10 years (capital investment between RM500 million to RM1 billion).
Existing company
ITA of 100% on QE incurred within five years, set-off against 100% of SI.
F: Kulai-Sedenak
(Manufacturing in AI and quantum computing supply chain, medical devices, and pharmaceuticals)
Incentives are similar to those under flagship E.
G: Desaru-Penawar
Integrated tourism project
- ITA of 100% on QE incurred within five years, set-off against 70% of SI.
- Tax deduction up to RM1 million per year of assessment up to ten years for contribution made to hallmark event of regional or international significance between 1 January 2025 to 31 December 2034.
H: Pengerang Integrated Petroleum Complex (PIPC)
(Refer to “Tax Incentives chapter – Oil & Gas”)
I: Forest City Special Financial Zone
Single family office (SFO) scheme
Income tax rate of 0% for 10 + 10 years on income generated by the SFO Vehicle certified by Securities Commission
Global Services Hub
Income tax rate of 5% up to 10 + 10 years
Smart logistic complex
ITA of 100% on QCE for 5 years, set-off against 100% of SI
Financial global business services
Income tax rate of 5% up to 10 + 10 years for operators of financial global business services, financial technology (fintech) and foreign-owned payment systems operator
Relocation of services in research & development, medical devices testing laboratory, etc.
Income tax rate of 5% for a period of 10 years + 10 years
All flagship areas
Knowledge workers
Income tax rate of 15% for up to ten years for individuals employed as knowledge workers employed in qualifying sectors within the JS-SEZ
Flagships A to G
Renovation cost
Accelerated Capital Allowance on qualifying renovation cost incurred on a building or part of commercial building located in flagship areas A to G
Economic corridors
Five economic corridors were introduced under the Ninth Malaysia Plan as part of a national strategy to reduce regional economic disparities, stimulate investment, and promote balanced and inclusive development across the country. Tax incentives are still available for the following:
Iskandar Malaysia (southern Johor)
- Approved developer - income tax exemption of SI derived from rental or disposal of a building located in an approved area until YA 2025 (Applications received by 31.12.2025)
- Non-resident - withholding tax exemption, for ten years, on royalty and technical fee received from IDR status company
Sarawak Corridor of Renewable Energy (SCORE)
Investors who make strategic investments in SCORE can apply for customised special incentive packages.
Application for tax incentives for the following economic corridors has closed and are subject to further announcement by the Government:
- Northern Corridor Economic Region (Perlis, Kedah, Penang, Perak)
- East Coast Economic Region (Kelantan, Terengganu, Pahang, Mersing in Johor)
- Sabah Development Corridor
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