On 7 January 2025, Malaysia and Singapore formally entered into an agreement to establish the Johor-Singapore Special Economic Zone, or JS-SEZ. The historic event took place nearly a year after the signing of a Memorandum of Understanding between the two countries to set up a special economic zone aimed at capitalising on the existing synergies between Johor and Singapore to unlock greater economic potential.
Key features and objectives of JS-SEZ
Attracting high-value investments
Key sectors including manufacturing, logistics, tourism, clean energy and the digital economy will see competitive tax incentives and streamlined regulations.
Facilitating movement of goods and people
A key focus of the JS-SEZ is to improve the flow of goods and people between Johor and Singapore. This includes enhancing customs processes, strengthening transport links and, potentially, implementing passport-free clearance systems at the border crossings.
Creating jobs
The initial target is to create 20,000 highly skilled jobs within the next 10 years through the implementation of 100 high-impact projects in JS-SEZ
Economic integration
Leveraging the strengths of both regions, JS-SEZ seeks to combine Malaysia's land and labour resources with Singapore's financial and investment capabilities to unlock economic benefits.
Flagship zones
The JS-SEZ will consist of nine designated flagship zones, each with its own focus and specialisation. These zones include existing developments like Iskandar Malaysia and the Pengerang Integrated Petroleum Complex, as well as new areas for development.
JS-SEZ tax incentive package
Following the media release jointly issued by the Ministry of Finance and the Johor State Government on 8 January 2025, the Malaysian Investment Development Authority (MIDA) has released a snapshot of the available tax incentive package for the nine flagship areas in the JS-SEZ.
The incentives enhance Malaysia's appeal as a prime destination for investment and talent, contributing to Malaysia's growth in providing robust business infrastructure, global business services, artificial intelligence (Al), quantum computing, supply chain, tourism projects, and so on.
Applications for the incentives are to be submitted to MIDA from 1 January 2025 to 31 December 2034. Detailed application guidelines will be made available by MIDA in due course.
Related reading: TaXavvy Issue 4/2025
In this issue of TaXavvy, we unpack the available tax incentive package for the flagship areas in the JS-SEZ and what’s in it for businesses and industries.
How we can help
To help you capitalise on these opportunities, we offer a comprehensive suite of services tailored to navigate the evolving landscape of the JS-SEZ. From helping you understand the intricacies of investment incentives and regulatory compliance to developing robust market entry strategies and leveraging cutting-edge technology, we are prepared to serve as a strategic partner, guiding businesses towards sustainable growth and success in this dynamic environment.
- Assess and invest
- Protect and comply
- Optimise and thrive
Assess and invest
Market entry strategy
Providing insights and strategies for entering the JS-SEZ, leveraging its strategic location, connectivity and cost advantages
Investment advisory
Assisting investors in understanding the various incentives and tax benefits available within the JS-SEZ, such as the special corporate tax rate for high-value activities and the special income tax rate for knowledge workers
Infrastructure and project financing
Supporting you across all stages of the infrastructure project lifecycle, from assessing project feasibility and offering fundraising advice, to developing growth strategies, and financial modelling and analysis.
Protect and comply
Corporate governance structure setup and policies & procedures development
Helping organisations institutionalise governance and reporting structures, processes and practices to ensure consistency of applications and clarity in accountability and decision-making
Risk management and assurance
Providing risk assessment and assurance services to ensure business continuity and operational resilience
Regulatory compliance
Helping you navigate the regulatory environment, including the streamlined processes and reduced compliance costs within the JS-SEZ
Tax compliance and advisory
Developing approaches and solutions to critical tax and business issues; helping you formulate effective tax strategies, innovative tax planning to optimise your tax efficiencies, contributing towards your overall corporate strategy. Also benefit from our specialist experience in indirect taxes, stamp duty, tax governance, transfer pricing, tax audits and tax technology
Optimise and thrive
Technology and innovation consulting
Assisting you in adopting new technologies and enhancing digital capabilities which are crucial for sectors like AI, quantum computing and digital services.
Human capital and talent management
Helping you optimise your workforce through expert advice on talent management, organisational development, compliance, and rewards and performance strategies. Our HR managed services help you comply with local and international labour laws through payroll outsourcing and a wider spectrum of human capital management services.
ESG advisory
Helping you be more ESG-ready through advice on ESG framework and governance, sustainability strategy, climate risk management, IFRS sustainability standards, emission management frameworks and training
Contact us
Taariq Murad
Tax Partner; Public Sector Leader; and Inclusion & Diversity Leader, PwC Malaysia
Tel: +60 (3) 2173 1580
