Following the signing of the historic Johor-Singapore Special Economic Zone (JS-SEZ) agreement, the Johor State Government and the Ministry of Finance (MoF) have announced the JS-SEZ incentive package.
In an effort to boost economic growth and improve the country’s competitiveness, the Johor State Government and MOF jointly released a statement stating that the JS-SEZ tax incentive package has been prepared to draw high-value investments to Johor while taking into account the changing needs of both domestic and foreign investors.
Starting 1st January 2025, investors in the JS-SEZ can apply for tax incentives, including:
- Special corporate tax rate: businesses can benefit from a special tax rate of 5% for up to 15 years if they make new investments in qualifying manufacturing and service sectors like international hub services, medical devices, AI and quantum computing, and aerospace.
- Flagship Development Focus: Companies that operate in the JS SEZ’s designated flagship areas are eligible for additional incentives.
- Special tax rate for knowledge workers: Qualified knowledge workers in the JS-SEZ are eligible for a special tax rate of 15% for ten years.
Johor’s Menteri Besar, Dato’ Onn Hafiz Ghazi, stated that the JS-SEZ incentive package helps to strengthen Johor’s standing as a major international investment destination.
“The MADANI Government and the Johor State Government have taken proactive steps to provide full support to the JS-SEZ in its efforts to attract investments. With the various advantages possessed by the state, the JS-SEZ will strengthen Johor’s position as a major trade and maritime hub in the region,” he added.
Onn Hafiz stated that the Johor State Government has agreed to lower the entertainment duty starting on 1st January 2025, in addition to the tax incentive package.
The JS-SEZ tax incentive package, according to Senator Datuk Seri Amir Hamzah Azizan, Minister of Finance II, demonstrates the government’s dedication to establishing win-win partnerships that will establish Malaysia as a significant regional investment destination.
He also stated that the government welcomes global businesses to explore the great opportunities that Malaysia has to offer.
“With the collaboration between Malaysia and Singapore, this JS-SEZ incentive package will accelerate the inflow of quality investment in key sectors and create high-income jobs, by leveraging the strengths and synergies between Johor and Singapore,” said the Senator.
Complementing the New Investment Incentive Framework announced in Budget 2025 by Prime Minister and Finance Minister Dato’ Seri Anwar Ibrahim, the JS-SEZ tax incentive package seeks to encourage investment in high-value industries with sustainable growth, thereby promoting equitable economic development across Malaysia.
With the help of the Ministry of Finance, Johor State Government, Ministry of Investment, Trade and Industry (MITI), Iskandar Regional Development Authority (IRDA), Malaysian Investment Development Authority (MIDA), TalentCorp, and other stakeholders, this tax incentive package was created to guarantee transparency and accessibility in accordance with global best practices.
The government has set up the Invest Malaysia Facilitation Centre Johor (IMFC-J) to coordinate the entire investment process, including application and approval, investment facilitation, and reinvestment, in order to speed up the investment application process in the JS-SEZ.
Further details on tax incentives and flagship zones will be announced in the near future.
