Johor-Singapore Special Economic Zone

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.

Stamp duty exemption

40% stamp duty remission for instruments of transfer and loan / financing for purchase of commercial unit in Johor Bahru Waterfront or Iskandar Puteri from a developer from 1 January 2025 to 31 December 2034.

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 (FCSFZ)

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

• One-off capital gains tax exemption on disposal of shares in an unlisted company to an SFO Vehicle made before 31 December 2034.

• One-off stamp duty exemption on instruments of transfer of permitted assets to an SFO Vehicle executed before 31 December 2034.

• 50% stamp duty remission for instruments of transfer and loan / financing for purchase of residential / commercial unit in Pulau 1 of the FCSFZ from a developer on or before 31 December 2034.

• Preferential real property gains tax rates for non-citizens and non-permanent residents for disposal of real property in Pulau 1 of the FCSFZ of which the sale and purchase agreement is executed before 31 July 2024 and stamped before 1 September 2034.

• 10% industrial building allowance on construction or purchase of a commercial building in Pulau 1 of the FCSFZ, owned and used for specified business activity and incurred on or before 31 December 2034.

• Tax deduction of prescribed and certified relocation cost, up to MYR 500,000, for relocation to Pulau 1 of the FCSFZ which takes place before 31 December 2034.

• Withholding tax exemption for income received on or before 31 August 2034 by a non-resident from a qualifying person operating in Pulau 1 of the FCSFZ.

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