On 7 January 2025, Prime Minister, Dato’ Seri Anwar Ibrahim and Singapore Prime Minister, Lawrence Wong, witnessed the formalisation of the Johor-Singapore Special Economic Zone (JS-SEZ) agreement. This landmark agreement aims to enhance cross-border economic collaboration by attracting high-value investments and facilitating the movement of goods and people between the two nations.
The JS-SEZ draws inspiration from China’s Shenzhen Special Economic Zone. In addition to this, Johor also has other economic zones, namely Iskandar Malaysia and the East Coast Economic Region, which covers the Mersing area.
The JS-SEZ is an initiative led by the Johor State Government and Singapore to strengthen economic collaboration by enhancing trade, investment and innovation opportunities between Johor and Singapore. The JS-SEZ is designed to serve as a bridge, enabling both sides to leverage their strengths for mutual growth as follows:
Facilitating cross-border movement
Over 300,000 people cross the Johor-Singapore land border daily via the two causeways linking the two nations. This often leads to long delays, disrupting the ease of doing business between both nations. With the implementation of the JS-SEZ, both governments aim to reduce travel time by introducing new passport-free travel systems. The introduction of the Rapid Transit System (RTS) will enhance economic integration and alleviate congestion at the Johor-Singapore Causeway.
Fostering bilateral economic growth
The JS-SEZ capitalises on the strengths of both Malaysia and Singapore, enabling businesses to leverage Singapore’s position as a hub for technology,business, and finance, while benefiting from Johor’s land resource as well as a centre for high-value industries and manufacturing.
Attracting investment
The introduction of attractive incentive packages for JS- SEZ is set to accelerate the inflow of quality investments across key sectors, fostering economic growth and creation of high-income jobs. The JS-SEZ tax incentive package complements the New Investment Incentive Framework, which aims to stimulate investments in high-growth, high-value, and sustainable industries.
Special incentive
Effective 1 January 2025, investors in the JS-SEZ will be eligible for incentives such as:
(a) a special tax rate of 5% for up to 15 years for companies undertaking new investment in qualifying manufacturing and services activities such as artificial intelligence and quantum computing supply chain, medical devices, aerospace manufacturing and global services hub.
(b) a special tax rate of 15% for 10 years for eligible knowledge workers working in the JS-SEZ.
(c) a lower entertainment duties starting from 1 January 2025.
Flagship Zones
The JS-SEZ spans over 3,000 square kilometres and comprises nine flagship zones, each focusing on distinct economic sectors. These zones are:
Johor Bahru City Centre | Business services, Digital Economy and Health |
Iskandar Puteri | Manufacturing, Business Services, Digital economy, Education, Health and Tourism |
Forest City | Financial Services |
Pengerang Integrated Petroleum Complex | Manufacturing, Energy and Logistics |
Tanjung Pelepas & Tanjung Bin | Manufacturing, Energy and Logistics |
Pasir Gudang | Manufacturing, Energy and Logistics |
Senai-Skudai | Manufacturing, Digital Economy, Education, Logistics and Tourism |
Sedenak | Manufacturing, Business Services, Digital Economy, Education, Energy, Food Security, Health, Logistics and Tourism |
Desaru | Education, Food Security, Health and Tourism |
The JS-SEZ represents a groundbreaking step in cross- border economic collaboration, fostering enhanced trade, investment and innovation. This initiative not only strengthens the ties between Malaysia and Singapore but also propels Johor’s economy further. Guided by its ambitious vision under the 'Maju Johor 2030’ theme, this transformative initiative enhances Johor's position as a leading investment gateway in ASEAN.
10 January 2025