THE NEXT BIG THING : How To Profit From JS-SEZ?

Published: 24 Feb 2025

Malaysia is starting 2025 on the right foot!

The recent updates by the government on the Johor-Singapore Economic Zone (JS-SEZ), has got everyone buzzing with excitement.

Boss, what benefits do you think the JS-SEZ will bring to your business?

Do you want to enjoy a 5% corporate tax rate instead of 24%?

If your business is under the promoted activities, and you’ve gotten your approval from the Malaysian Investment Development Authority (MIDA), you can enjoy a special corporate tax rate of 5% for up to 15 years!

For the past weeks, our clients in the manufacturing industry have been asking us if they should shift their expansion plans to Johor.

While some entrepreneurs anticipate a surge in business opportunities and growth fueled by the JS-SEZ, others view it as a challenge, bracing for intensified competition in the market.

JS-SEZ And Its ATTRACTIVE Tax Rates

To attract high-value investments and skilled professionals, starting January 1st 2025, investors in the JS-SEZ initiative will enjoy the following tax incentives:

Special corporate tax rate

Companies undertaking new investments in qualifying high-growth and high value-added activities within the JS-SEZ - such as artificial intelligence and quantum computing supply chains, medical devices, aerospace manufacturing, and global services hubs - will benefit from a preferential corporate tax rate of 5% for up to 15 years!

What does this mean?

MORE TAX SAVINGS.

The current corporate tax rate in Malaysia is as below:

Imagine how much tax savings your company can benefit from in 15 years with the 5% tax rate?

And in return, the tax savings can be used to benefit your company for future expansion plans or investment in your talents.

Special tax rate for knowledge-based employees

There is also a special tax rate for knowledge-based workers employed in the JS-SEZ.

Qualified employees are entitled to a personal income tax rate of 15% for up to 10 years.

Imagine the massive tax savings you can benefit from, especially if your chargeable income falls under the higher percentage of the personal tax rate.

RTS: Travelling Between Johor and Singapore At A Breeze

A key element of the JS-SEZ is the Rapid Transit System (RTS) Link, which is currently under construction and expected to be completed by December 2026.

This long-awaited infrastructure marvel is set to revolutionize cross-border connectivity between Malaysia and Singapore, and when operational it’s set to carry around 10,000 passengers per direction per hour which will help ease congestions on the land crossing.

Picture this: A seamless 4km link stretching from Bukit Chagar in Johor Bahru to Woodlands North in Singapore, with travel time cut to just FIVE MINUTES. Yes, five minutes!

That kind of convenience is a game-changer, especially for Malaysians who work in Singapore and Singaporeans hunting for more affordable housing.

In addition to that, the RTS is also set to be a boon for commercial and retail growth in the surrounding areas.

With the influx of business activity and consumer traffic, commercial property values are bound to rise.

What Else Do You NEED To Know About The JS-SEZ Initiative?

There are seven designated flagship zones in the JS-SEZ initiative, each specializing in a distinct sector. Here is an illustrated map of Johor and the respective flagship zones.

The JS-SEZ boasts excellent connectivity across its seven zones, supported by an extensive network of highways and major roads. Toll roads such as the North-South Highway and the Senai-Desaru Highway ensure seamless access throughout the region, while toll-free alternatives like Jalan Skudai, Jalan Pasir Gudang, and the East Coast Highway further enhance mobility.

For cargo exports, the zone is strategically connected to key transportation hubs, including Senai International Airport and multiple seaports: the Port of Tanjung Pelepas (PTP), Johor Port, and Tanjung Langsat Port. Among these, PTP is globally recognized as the 5th most efficient container port, specializing in container shipments, while Johor Port and Tanjung Langsat Port focus on regional general bulk and liquid cargo.

The industrial estates within the SEZ enjoy favorable proximity to these logistics hubs, with driving distances ranging from 15 km (Iskandar Puteri to PTP) to 70 km (Pengerang to Tanjung Langsat Port), ensuring efficient transport of goods and materials.

To find out more on the flagship development focus of the incentive package, click here.

Opening up corridors of opportunities

Remember, where there are opportunities, competition and challenges will follow.

Entrepreneurs must strive, innovate, and adapt to stay ahead in this dynamic landscape.

The future of the JS-SEZ brings huge optimism and it is with hope that this will attract our top talents back to Malaysia.

Together, let's work towards restoring our nation’s former glory as the "Asian Tiger!"