Malaysia offers tax incentives for companies, workers in Johor-Singapore Special Economic Zone

By Reuters January 8, 2025 | 12:01 am PT

A view of the causeway linking Malaysia's southern state of Johor (top) and Singapore (botom) as seen from Singapore on April 1, 2020. Photo by AFP

Malaysia will offer tax incentives for companies and workers in its special economic zone with Singapore in the southern state of Johor, its finance ministry said on Wednesday.

The incentives, effective Jan. 1, include a tax rate of 5% for up to 15 years for companies undertaking new investments in manufacturing and services, such as artificial intelligence and quantum computing supply chain, medical devices, and aerospace manufacturing.

Skilled workers will also be offered an income tax rate of 15% for 10 years.

Malaysia and Singapore announced on Tuesday an agreement on a special economic zone in the southern Malaysian state of Johor, aiming to support investment and free up movement of goods and people between the countries.

The Southeast Asian neighbours first agreed in principle to jointly develop the economic zone a year ago.

The two countries are aiming to attract high-value investments into Johor in sectors ranging from manufacturing and logistics to tourism and energy transition, Malaysia's Economic Minister Rafizi Ramli told reporters.

They are targeting 50 projects at the economic zone within the first five years of its inception, and the creation of 20,000 skilled jobs.