The Johor-Singapore Special Economic Zone (JS-SEZ) marks a transformative chapter in cross-border economic collaboration between Malaysia and Singapore. Designed to enhance investment flows, stimulate innovation, and create a seamless business ecosystem, the JS-SEZ builds on the long-standing economic ties between the two nations.
With the official agreement signed and an incentive package unveiled by the Malaysian government on January 8, 2025, the JS-SEZ is poised to attract high-value investments across key sectors, including advanced manufacturing, global services, integrated tourism, and smart logistics. This initiative not only strengthens Johor’s position as a strategic investment destination but also reinforces the Malaysia-Singapore growth corridor as a global economic hub.
As businesses and investors explore the opportunities within this dynamic economic zone, the JS-SEZ stands as a testament to regional cooperation, paving the way for sustainable development and economic prosperity.
EFFECTIVE DATE OF APPLICATION
01/01/2025 to 31/12/2034
Manufacturing Business
Applicable Industries
- Artificial Intelligence (AI) and Quantum Computing Supply Chain;
- Medical Devices;
- Pharmaceutical; or
- Aerospace Manufacturing and Maintenance, Repair, Overhaul (MRO) Services
Tax Incentive
| Type of Company |
Tax Incentive |
Period |
| New Company |
New investment in the manufacturing sector with capital investment (excluding land) above RM1 billion |
Tax Rate of 5% |
15 years |
| New investment in the manufacturing sector with capital investment (excluding land) between RM500 million to RM1 billion |
Tax Rate of 5% |
10 years |
| Existing Company |
New investment in the manufacturing sector with capital investment (excluding land) above RM500 million for existing company in Malaysia relocating overseas facilities (for a new business segment not expansion of existing products) into Malaysia |
Investment Tax Allowance of 100% on the qualifying capital investment (excluding land) incurred within 5 years, against 100% of statutory income |
5 years |
Area of Incentive
- Flagship F - Kulai - Sedenak (AI and Quantum Computing, Supply Chain, Medical Devices, and Pharmaceutical)
- Flagship E - Senai - Skudai (Aerospace Manufacturing and MRO Services)
Global Servies Hub
Applicable Industries
- Regional P&L;
- Strategic Business Planning;
- Corporate Development; and
- Regional or Global Treasury and Fund Management conducting cash pooling activities via onshore intermediaries
Tax Incentive
- Special tax rate of 5% for a period up to 15 years
Eligible Criteria / Conditions
- Annual operating expenditure of at least RM50 million;
- Company must serve / business control of at least 10 Network Companies;
- Annual sales turnover of at least RM500 million and forex in-flow into the local banking system as proposed;
- A minimum of 50% of high-value positions (with a minimum monthly basic salary of RM10,000) shall be filled by full-time Malaysian employees as proposed.
Area of Incentive
- Flagship A - Johor Bahru Waterfront
- Flagship B - Iskandar Puteri
Integrated Tourism Project
Tax Incentive
- Investment Tax Allowance (ITA) of 100% qualifying capital expenditure incurred within 5 years. The allowance can be offset against 70% of the statutory income for each year of assessment.
Eligible Criteria / Conditions
- Company which does not have an existing entity or related entity undertaking same hotel or tourism project in Malaysia;
- Paid-up capital of at least RM2.5 million;
- Investment in capital expenditure (excluding land) of at least RM500 million;
- Company undertaking integrated tourism project which consists of the followings:
- Hotel with minimum number of rooms of 80 which consists of standard, superior, deluxe and suite; and
- Minimum 1 tourist attractions (i.e. water park, outdoor park consists of rides and/or games, convention centre with capacity minimum of 3,000 participants, or outdoor sport excluding golf course and driving range).
Area of Incentive
- Flagship G - Desaru - Penawar
Smart Logistics Complex
Applicable Industries
Smart logistic operator who invests in development of smart logistics and carry out any of the eligible logistic activities:
- Regional Distribution Hub
- Integrated Logistic Services
- Dangerous Goods Storage
- Cold Chain Facilities
Tax Incentive
- Investment Tax Allowance (ITA) of 100% qualifying capital expenditure incurred within 5 years. The allowance can be offset against 100% of the statutory income for each year of assessment.
Eligible Criteria / Conditions
- Investment in capital expenditure (excluding land) of at least RM500 million;
- The built-up area of the smart warehouse complex must be at least 50,000 m2 and equipped with at least 3 enabling elements technologies under the IR4.0;
- Use the application of modern construction techniques i.e. achieving a score for the Industrial Building System (IBS) that has been set by the Construction Industry Development Board (CIDB);
- Total full-time workforce must consist of at least 80% Malaysian citizens;
- A minimum of 30% of total high-value positions (with a minimum basic salary of RM10,000) shall be filled by full-time Malaysian employees.
Area of Incentive
- Flagship C - Tanjung Pelepas
Manufacturing - Downstream Specialty Chemicals
Tax Incentive
- Base chemical - methanol, ethylene, propylene, benzene, aromatics
- Organics intermediates - C1 to C6
- Specialty chemical
- Fertilizers
- Polymers / plastics
- Oleochemical / biochemical
Tax Incentive
Special Tax Rate for a company with capital investment (excluding land) of RM500 million and above in the manufacturing sector;
- Tier 1: 5% Special Tax Rate for up to 10 years (5 years + 5 years)
- Tier 2: 10% Special Tax Rate for up to 10 years (5 years + 5 years)
OR
Income Tax Exemption equivalent to Investment Tax Allowance (ITA) for a company with capital investment (excluding land) of RM500 million and above in the manufacturing sector;
- Tier 1: Income tax exemption equivalent to ITA of 100% on the qualifying capital investment (excluding land) for up to 10 years (5 years + 5 years). The allowance can be offset against up to 100% of statutory income for each assessment year.
- Tier 2: Income tax exemption equivalent to ITA of 60% on the qualifying capital investment (excluding land) for up to 10 years (5 years + 5 years). The allowance can be offset against up to 100% of statutory income for each assessment year.
Area of Incentive
- Flagship D - Tanjung Langsat - Kong-Kong
Additional Incentives
Tax Incentive
- 40% stamp duty exemption on the instrument of transfer / financing agreement for the purchase of a commercial property in Flagship A - Johor Bahru Waterfront and B - Iskandar Puteri that remains unsold as at 31/12/2024. The stamp duty exemption to be provided under Section 80(1) under the Stamp Duty Act 1949.
- A deduction equivalent to amount not exceeding RM1 million for each year of assessment in respect of cash contritbuion or contribution in-kind by qualifying person who sponsors a hallmark event.
The hallmark event referred to is an event of regional or international significance which is carried on in Flagship G - Desaru – Penawar and supported / verified by MOTAC. For contribution made between 01/01/2025 to 31/12/2034.
- ACA in respect of renovation costs incurred on a building or part of a commercial building located in Flagship A - G for the purpose of qualifying company's business. Qualifying companies are companies that have been approved any tax incentives under PIA 1986 or ITA 1967 between 01/01/2025 - 31/12/2034 and operating in Flagship A - G. This incentive to be utilised only once throughout their business operation in JS-SEZ.
To include expenses:
- General electrical installation
- Lighting
- Gas system
- Water system
- Kitchen fittings
- Sanitary fittings
- Door, gate, window, grill and roller shutter
- Fixed partitions
- Flooring (including carpets)
- Wall covering (including paint work)
- Incentives and eligible criteria
- False ceiling and cornices
- Ornamental features or decorations excluding fine art
- Canopy or awning
- Recreation room for employee
- Air-conditioning system
- Day care centre for employee's children
- Surau
- Reception area
- Green elements, smart solutions systems
Initial allowance: 20% and annual allowance: 40%
Knowledge Worker Incentive
Tax Incentive
15% flat tax rate on chargeable employment income for a period of 10 years.
Eligible Criteria / Conditions
- Malaysian / non-Malaysian citizen;
- Not generating employment income in Malaysia 24-months prior;
- Salary abroad / in Malaysia > RM20,000 per month;
- Subject to academic qualifications / years of professional work experience;
- Subject to MyCOL profession and JS-SEZ qualifying sectors.
Area of Incentive
- All flagships
Please do not hesitate to contact us at
[email protected] for more information.
Malaysia