Malaysia announces tax incentives for Johor-Singapore Special Economic Zone

• Companies making new investments in qualifying manufacturing and services — such as in artificial intelligence and quantum computing supply chain, medical devices, aerospace manufacturing and global services hub — will enjoy a special tax rate of 5% for up to 15 years.

KUALA LUMPUR (Jan 8): Investors in the Johor-Singapore Special Economic Zone (JS-SEZ) are eligible for a suite of incentives, including a special corporate tax rate that takes effect on Jan 1, the Finance Ministry said on Wednesday.

Companies making new investments in qualifying manufacturing and services — such as in artificial intelligence and quantum computing supply chain, medical devices, aerospace manufacturing and global services hub — will enjoy a special tax rate of 5% for up to 15 years, according to a statement.

“In a bid to foster economic growth and enhance the nation’s competitive landscape, the tax incentive package for JS-SEZ is designed to drive high-value investments into Johor, tailored to meet the evolving needs of global and domestic investors,” the ministry said.

Besides that, additional tailor-made incentives are allocated to businesses operating in certain flagship areas in JS-SEZ.

And lastly, eligible knowledge workers working in JS-SEZ are entitled to a special tax rate of 15% for 10 years.

In addition to the tax incentive package, Johor Menteri Besar Datuk Onn Hafiz Ghazi said the Johor state government had agreed to introduce lower entertainment duties starting from Jan 1.

Meanwhile, Finance Minister II Datuk Seri Amir Hamzah Azizan said the JS-SEZ tax incentive package reflects the government's commitment to welcome global businesses to explore the vast opportunities Malaysia has to offer.

“Building on the cooperation between Malaysia and Singapore, the incentive package for JS-SEZ will accelerate drawing in quality investments in key sectors and promote the creation of higher-income jobs, leveraging on the respective strengths and synergies between Johor and Singapore,” said Amir Hamzah.

The JS-SEZ tax incentive package complements the New Investment Incentive Framework announced in Budget 2025 by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim which aims to propel investments in high-growth, high-value and sustainable industries to stimulate equitable economic development across Malaysia.

Designed to ensure transparency and accessibility, in alignment with international best practices, the incentive package reflects the extensive collaboration between the Finance Ministry, the Johor state government, the Investment, Trade and Industry Ministry, the Iskandar Regional Development Authority, the Malaysian Investment Development Authority, TalentCorp, and other key stakeholders.

To facilitate an expedient and more convenient investment application process in JS-SEZ, the government has set up the Invest Malaysia Facilitation Centre Johor to coordinate the end-to-end investment-related process, which includes applications and approvals, investment facilitation, and reinvestment.

Further details on the tax incentives and the flagship zones will be announced in due course, read the statement.

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