Malaysia has unveiled a series of tax breaks and incentives for the Forest City development, officially designated as the Forest City Financial Zone (FCSFZ) in August 2023. Located in southern Johor, adjacent to Singapore, this initiative aims to stimulate foreign investment and enhance economic activities within the project.
The incentives introduced for the FCSFZ include a concessionary corporate tax rate ranging from zero to 5% and a special individual income tax rate of 15% for skilled workers, as well as Malaysians employed in the area. Additionally, Malaysia will implement a zero percent tax rate for family offices and a reduced 5% tax rate for financial technology and foreign payment system operators. Banking entities and financial institutions operating within the FCSFZ will benefit from various incentives, including deductions for relocation costs, withholding tax exemptions, and allowances for industrial buildings, all aimed at attracting businesses, financial institutions, and high-net-worth individuals.
Forest City is part of a larger smart city initiative that combines cutting-edge technology, green spaces, and sustainable infrastructure to build a forward-thinking urban landscape. The establishment of FCSFZ coincides with Malaysia and Singapore’s plans to launch the Singapore-Johor Baru Special Economic Zone (SEZ). Its strategic location near the SEZ allows the FCSFZ to leverage these cross-border opportunities effectively. Businesses within the FCSFZ can take advantage of Malaysia’s attractive tax incentives and lower operating costs, all while enjoying easy access to Singapore’s global markets and sophisticated financial services infrastructure.
(Sources: The Edge Malaysia; ASEAN Briefing)
