Kuala Lumpur, Malaysia, January 8 – The Government of Malaysia, in collaboration with Singapore, has officially launched the Johor-Singapore Special Economic Zone (JS-SEZ), aimed at fostering closer economic ties and stimulating business growth in the region. This landmark initiative is designed to attract investments, particularly in high-growth sectors, by offering an array of attractive tax incentives.
On the same day, Malaysia unveiled the JS-SEZ Tax Incentive Package, which will be available for applications submitted to the Malaysian Investment Development Authority (MIDA) from 1 January 2025 until 31 December 2034. The package is designed to encourage investments in key sectors such as Artificial Intelligence (AI), Quantum Computing, Medical Devices, Pharmaceuticals, Aerospace Manufacturing, Global Services Hubs, and Smart Logistics, among others.
Key Highlights of the JS-SEZ Tax Incentive Package:
- Special Corporate Tax Rate:
- 5% for up to 15 years for new investments in sectors such as AI and Quantum Computing Supply Chain, Medical Devices, Pharmaceuticals, and Aerospace Manufacturing and MRO Services.
- 5% for up to 15 years for Global Services Hub Projects, including Regional P&L, Strategic Business Planning, Corporate Development, and Global Treasury and Fund Management activities conducted via onshore intermediaries.
- 5%-10% for up to 10 years for investments in Downstream Specialty Chemicals.
- Investment Tax Allowance (ITA):
- 100% ITA for qualifying capital expenditure incurred within 5 years for Integrated Tourism Projects.
- 100% ITA for qualifying capital expenditure incurred within 5 years for Smart Logistics Operators investing in smart logistics development and eligible logistics activities.
- Additional Incentives:
- Special incentives for businesses operating in flagship areas within the JS-SEZ.
- Knowledge Worker Incentive: A 15% flat tax rate on chargeable employment income for a period of 10 years for knowledge workers in designated sectors.
- JS-SEZ Tax Incentive Packages Under MIDA:
- Manufacturing Business Incentive Scheme
- Global Services Hub
- Integrated Tourism Project
- Smart Logistics Complex
- Manufacturing – Downstream Specialty Chemicals
- Do note that incentives and eligibilities differ from each package to another
- Bonus Incentives:
- Additional Incentives
- Knowledge Worker Incentive
The JS-SEZ is a strategically designated area in Johor, Malaysia, which serves as a key platform for economic collaboration between Malaysia and Singapore. With its advantageous location and robust infrastructure, the JS-SEZ is set to become a dynamic hub for investment and innovation in Southeast Asia.
This tax incentive package is part of the broader effort to position the JS-SEZ as a premier destination for businesses seeking to expand their presence in Malaysia and Singapore, especially in sectors that drive economic transformation and technological advancement.
