Malaysia announces tax incentives for Johor-Singapore SEZ

It includes a 5% corporate tax rate for up to 15 years for companies in advanced sectors.

The Johor State Government and Malaysia’s Ministry of Finance (MoF) have announced a tax incentive package for the newly established Johor-Singapore Special Economic Zone (JS-SEZ), effective 1 January, to boost economic growth and attract global and domestic investments to Johor.

Key incentives include a 5% corporate tax rate for up to 15 years for companies in advanced sectors such as AI, quantum computing, medical devices, aerospace, and global services hubs.

Additional benefits are tailored to businesses operating in designated flagship areas within the JS-SEZ, whilst eligible knowledge workers employed in the zone will benefit from a preferential tax rate of 15% for up to 10 years.

Menteri Besar of Johor, YAB Dato’ Onn Hafiz Ghazi, cited the significance of the incentives in enhancing Johor’s global investment appeal. He also announced a reduction in entertainment duties, effective 1 January, to further encourage investment.

Additionally, Finance Minister II, YB Senator Datuk Seri Amir Hamzah Azizan, emphasised the importance of the JS-SEZ in strengthening Malaysia’s position as a key investment destination.

He noted the synergies between Malaysia and Singapore, which the JS-SEZ will leverage to attract quality investments and create higher-income jobs.

The tax incentive package complements the New Investment Incentive Framework introduced in Budget 2025 by Prime Minister YAB Dato’ Seri Anwar Ibrahim, focusing on high-value and sustainable industries.

To streamline investment processes, the government has set up the Invest Malaysia Facilitation Centre Johor to handle applications, approvals, and other investment-related activities. The initiative reflects the collaboration between the MoF, Johor State Government, Ministry of Investment, Trade and Industry, Iskandar Regional Development Authority, Malaysian Investment Development Authority, and TalentCorp.