22.01.2025

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Unlocking Opportunities Next Door: Forest City Special Financial Zone and the Johor-Singapore Special Economic Zone

Johor, Malaysia, is increasingly gaining attention as a jurisdiction of strategic significance. The establishment of the Forest City Special Financial Zone (FCSFZ) and the Johor-Singapore Special Economic Zone (JS-SEZ) underscores its growing appeal for businesses, investors, and families alike. These zones offer a range of opportunities to enhance operational efficiency and serve as a platform for regional and global expansion. For those evaluating options in Southeast Asia, the JS-SEZ and FCSFZ merit close consideration.

FCSFZ:
We previously featured the FCSFZ, a Malaysian government initiative launched around September 2024 to revitalize the Forest City development in Johor. Designed to attract foreign and regional families to manage their wealth from Malaysia, the FCSFZ offers tax exemptions on income from designated investments, not unlike Singapore’s Single Family Office (SFO) tax incentive schemes.1 Additionally, it provides a reduced tax rate incentive aimed at fostering an ecosystem of fund managers, professionals, service providers, and technology companies, positioning Forest City as a hub for financial and innovative services.

JS-SEZ:
Signed on January 5, 2025, by Malaysia’s Minister of Economy Rafizi Ramli and Singapore’s Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong, and witnessed by Prime Ministers Anwar Ibrahim and Lawrence Wong, the Johor-Singapore Special Economic Zone (JS-SEZ) is a collaborative initiative to create a seamless economic zone linking nine designated areas across Johor and Singapore.2

The JS-SEZ aims to facilitate efficient movement of goods and people between Malaysia and Singapore, offers favorable tax incentives, and is supported by the JS-SG Rapid Transit System due to be launched in 2026.3

Business applications and approvals within the zone will be streamlined through the newly set up Investment Malaysia Facilitation Centre Johor (IMFC-J),4 which serves as the dedicated government agency for this purpose.

Forest City &. JS-SEZ: Complementary and Compelling Proposition
The development of the FCSFZ and JS-SEZ evidence Malaysia’s and Singapore’s joint commitment to creating an economic power zone. Whilst it would first appear that the schemes introduced in both the FCSFZ and JS-SEZ overlap, it is our view that the primary sectorial focus of the two economic zones differ. The FCSFZ primarily focuses on attracting financial services and wealth management companies and professionals. In contrast, the JS-SEZ is a broader collaboration between Singapore and Malaysia aimed at fostering economic integration and attracting investments across diverse industries, including manufacturing, logistics, technology, and digital infrastructure and targets regionally. This reflects two distinct but complementary approaches to regional economic development.

Potential Opportunities in a Nutshell
The table below is a quick snapshot of the incentives offered by these two zones:

Category Forest City (FCSFZ) Johor-Singapore SEZ (JS-SEZ)
Corporate Tax 0%–5% tax rate for qualifying businesses in financial services, fintech, and global services. 5% tax rate for high-value industries (e.g., manufacturing, healthcare) for up to 15 years.
Personal Income Tax 15% for knowledge workers, applicable for 10 years. 15% for knowledge workers, applicable for 10 years.
Family Office Incentives 0% tax (10-year + 10-year extension) for Single Family Offices with a minimum AUM of RM30 million under the FCSFZ scheme. No specific family office incentives.
Focus Industries Financial services, fintech, global business hubs, and family offices. Advanced manufacturing, green energy, healthcare, logistics, and aerospace.
Investment Incentives Tailored tax benefits for financial services, green initiatives, and professional services. Customizable packages for high-value investments in multiple industries.

*Full details on the incentives remain subject to finalization by the relevant authorities.

 
Beyond the incentives, these economic zones present a strategic option for businesses seeking proximity, space, and a potentially lower-cost operating environment. Johor’s halal-certified facilities provide food producers with a strategic gateway to Middle Eastern markets, extending far beyond the established demand in Muslim-majority Southeast Asian countries. At the same time, Johor is rapidly emerging as a critical data hub in Southeast Asia. This growth has been fuelled by Singapore’s temporary pause on new data centre developments from 2019 to 2022 and the US-China trade war, which spurred diversification into the region.

While Penang and Klang have traditionally been hubs for semiconductor firms due to their free trade zones and skilled labour force, Johor is increasingly attracting global players. These include SEA Ltd, Princeton Group, and government-linked companies like Nxera (Singtel), ST Telemedia GDC, and Keppel, alongside major US corporations such as Equinix and Microsoft. Chinese firms, including Bridge Data Centre (ByteDance) and GDS Holdings, have also made significant investments in the region.

With enhanced digital infrastructure, Johor is poised to create new opportunities for businesses to seamlessly integrate into regional and global supply chains.

How we are Positioning for the New Opportunity
We’re excited to announce that our Forest City offices will be up and running by the first quarter of 2025. Our Forest City expansion aims to navigate and accumulate the experience to offer our families a comprehensive one-stop solution tailored to their specific needs.

What We Offer:

  1. Integrated Wealth and Business Services
    From trust and estate planning to fund structuring, we aim to create a platform that facilitates seamless cross-border wealth management and supports business expansion within the SEZ and FCSFZ.
  2. Customizable Incentive Utilization
    Our presence within the FCSFZ allows us to provide tailored solutions, including optimizing tax benefits, investment opportunities, and facilitating residency programs for businesses, families, and investors.
  3. Regional Expertise with Global Reach
    With 40 years of experience supporting businesses, high-net-worth individuals, and families in Singapore, we are well-positioned to extend our deep knowledge to clients exploring opportunities in the FCSFZ and JS-SEZ.

How We Can Help
Specifically, we can assist with:

  • Incorporating Malaysian companies.
  • Setting up trusts and foundations for wealth and legacy planning.
  • Applying for family office incentives under the Forest City scheme.
  • Coordinating with the Securities Commission for approvals.
  • Opening Malaysian bank accounts.
  • Drafting management agreements for family offices.
  • Securing office space in Forest City.
  • Providing accounting, fund administration, and tax liaison services.
  • Offering other value-added services related to wealth and estate planning.

We are continually expanding our range of services to better support our clients—please stay tuned for updates.

Please do not hesitate to contact us at [email protected] for a confidential discussion on how we can help you maximise the opportunities in the JS-SEZ and FCSFZ. Let’s shape what’s next—together.
 

*This article is provided for informational purposes only and does not constitute legal or professional advice. The information presented is based on publicly available sources and is intended as a general reference. Any statements regarding policies or developments are forward-looking in nature and should not be interpreted as guarantees or definitive statements of future actions or outcomes. For specific advice tailored to your circumstances, please consult a qualified professional.

 

1https://www.pmo.gov.my/2023/08/special-financial-zone-to-be-created-in-forest-city-pm-anwar/
2https://www.straitstimes.com/singapore/spore-msia-sign-agreement-on-johor-singapore-special-economic-zone-20000-jobs-to-be-created
3https://www.straitstimes.com/asia/se-asia/jb-s-pore-rts-link-project-reports-steady-progress-nears-80-completion
4https://www.irda.com.my/imfc-j/