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Companies undertaking new investment in industries such as medical devices, aerospace manufacturing, and more can enjoy a special tax rate of 5% for up to 15 years.
On Tuesday (7 January), the 11th Leaders’ Retreat between Malaysia and Singapore took place, culminating in the signing of the Johor-Singapore Special Economic Zone (JS-SEZ) agreement.
Building on the retreat’s momentum, the Johor State Government and Malaysia’s Ministry of Finance (MoF) has unveiled a tax incentive package for the JS-SEZ. Effective from 1 January 2025, the package is designed to attract high-value investments and address the evolving needs of both global and domestic investors.
The JS-SEZ tax package offers a range of incentives, including:
- Special corporate tax rate: Companies undertaking new investment in qualifying manufacturing and services activities, such as AI and quantum computing supply chain, medical devices, aerospace manufacturing and global services hub, will benefit from special tax rate of 5% for up to 15 years.
- Flagship development focus: Additional tailor-made incentives will be allocated to businesses operating in certain flagship areas in JS-SEZ.
- Special tax rate for knowledge workers: Special tax rate of 15% for 10 years for eligible knowledge workers working in JS-SEZ.
Malaysia’s Finance Minister II, Datuk Seri Amir Hamzah Azizan, said the Government welcomes global businesses to explore opportunities in Malaysia. He said: "Building on the cooperation between Malaysia and Singapore, the incentive package for JS-SEZ will accelerate drawing in quality investments in key sectors and promote the creation of higher-income jobs, leveraging on the respective strengths and synergies between Johor and Singapore.”
Johor Menteri Besar YAB Dato’ Onn Hafiz Ghazi (pictured above, followed by Singapore Prime Minister Lawrence Wong and Malaysia Prime Minister Anwar Ibrahim respectively). added: “The MADANI and the Johor State Governments have worked collaboratively to provide the JS-SEZ a shot in the arm to drive investments. With the multitude of advantages that this state possesses, the JS-SEZ will solidify Johor’s position as a major trade and maritime hub in the region.”
Additionally, the Johor State Government has agreed to introduce lower entertainment duties starting from 1 January 2025.
The JS-SEZ tax incentives are expected to complement the New Investment Incentive Framework (NIIF), introduced in Budget 2025 by PM Anwar, which is working towards attracting investments in high-growth, high-value, and sustainable industries.
To streamline investment applications and approvals, the government has established the Invest Malaysia Facilitation Centre Johor (IMFC-J). This center will oversee the entire investment process, from initial applications to facilitation and reinvestment support.
Further details on the tax incentives and flagship zones will be announced in due course.
Lead image / Menteri Besar Johor Onn Hafiz Ghazi Facebook post
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