KUALA LUMPUR: Malaysia and Singapore today kicked off the much-awaited Johor-Singapore Special Economic Zone (JS-SEZ) with the ambitious target of attracting 100 projects in 10 years.
The JS-SEZ now covers the Iskandar development region, Forest City, Pengerang Integrated Petroleum Complex and Desaru, a land area of 357,128 hectares.
The Iskandar development region also covers Johor Bahru City Centre, Iskandar Puteri, Tanjung Pelepas-Tanjung Bin, Pasir Gudang, Senai-Skudai and Sedenak.
It also covers new priority sectors such as aerospace, electrical and electronics, chemical, medical devices and pharmaceuticals. These are in addition to other sectors such as business services, digital economy, healthcare, manufacturing, tourism, education, logistics, energy and food security.
"Both countries are committed to promoting the expansion of 50 projects for the first five years and accumulating 100 projects in the first 10 years. What we want to do is really populate the SEZ with the right portfolio and investors," Economy Minister Rafizi Ramli told media and analysts in a briefing last week.
"I feel that the first wave of takers in the next five years are those global companies looking to manage their geopolitical risks. We have an advantage because of Asean's viability as a major economy in the next 15 years,".
Rafizi also said that energy transition companies will be the main targets for the economic zone, because of the growth in data centres.
The Malaysian government will establish a fund for purposes of infrastructure support while the Singapore government will design funding support to facilitate the expansion of Singaporean companies in the economic zone.
It will also look into the potential of twinning operations of multinational companies in Singapore and JS-SEZ.
"The government expects more people to move to Johor. It has yet to make any decisions but discussions on commitments to upgrade Johor's public transport have taken place," said Rafizi.
Pro business policies and incentives
Rafizi said that Malaysia's pro business policies and incentives will drive business growth in the economic zone. There will be special corporate tax and personal income tax rate for companies that undertake new investments in high growth and high value-added activities within the JS-SEZ.
The special personal income tax rate will be announced by the Finance Ministry at a later date.
Other incentives include for relocating to Malaysia and green technology, Global Services Hub incentive and Pioneer Status and Investment Tax Allowance. On the quantum of investment expected, the minister said the government will only be able to identify that after the agreement was signed.
"After the agreement is signed, we will be able to identify more notes and clusters that will allow the government to work closely with investors to prepare those areas to make it palatable for them to move in. Most probably this will function more on a project to project basis," he added.