Both nations target 100 projects within the first decade.
Analysts suggest tax breaks will likely be the SEZ's main attraction.
Mming to attract 50 projects in the first five years. Prime Ministers Anwar Ibrahim and Lawrence Wong officiated the ceremony in Johor, Malaysia’s southern state, which borders Singapore. The signing was postponed from December due to Wong contracting Covid.
The SEZ, spanning over 3,500 square kilometers, aims to emulate Shenzhen's success, becoming more than four times larger than Singapore. It seeks to create up to 100,000 jobs and add US$26 billion annually to Malaysia’s economy by 2030. Both countries pledged to promote 100 projects within the first decade, leveraging incentives like special tax rates.
Prime Minister Wong highlighted the project's importance for enhancing competitiveness and attracting joint investments. However, past efforts to strengthen ties, such as a high-speed rail project, have faced challenges. Officials aim to ease cross-border bottlenecks and ensure seamless business operations between Johor and Singapore.
Analysts note that while tax incentives are crucial, streamlining investment and tax policies is essential for attracting new businesses. Customs duties and sales tax exemptions are expected minimums for companies considering Johor as a supply chain hub.
Source: Boomberg, The Edge
