The initiatives and tax breaks are expected to spur new business and catalyze growth in Johor state’s Forest City development.
The Malaysian government recently inaugurated the Forest City Special Financial Zone (SFZ) in Iskandar Puteri, Johor, marking a significant move towards creating a thriving international business hub. Spanning four man-made islands across 30 square kilometres, Forest City represents a US$100 billion investment through a partnership between Country Garden Pacificview Sdn Bhd and Esplanade Danga 88 Sdn Bhd, a government-backed entity.
Prime Minister Datuk Seri Anwar Ibrahim first announced the SFZ in August 2024, with the intention to offer a suite of attractive incentives designed to boost the region’s appeal to global businesses. Among the key perks are a 15% special income tax rate for skilled workers and the introduction of multiple entry visas, which are expected to ease mobility for foreign talent. In addition, Johor’s state government has proposed that Forest City SFZ be integrated into the larger Johor-Singapore Special Economic Zone (JS-SEZ), further cementing its strategic importance.
One of the standout incentives announced during the official launch on Friday, September 20, was a zero percent tax rate for family wealth offices, which is expected to be introduced by Q1 2025. This is a first for Malaysia and positions Forest City as a potential magnet for high-net-worth individuals and family enterprises. The zone will also offer concessionary corporate tax rates between zero and five percent to attract global business services, financial technology companies, and foreign payment system operators.
For financial companies considering setting up in Forest City, the government has rolled out further benefits, such as special deductions on relocation costs, enhanced industrial building allowances, and exemptions from withholding tax. These incentives aim to make the SFZ a leading destination for international financial services and innovation, ultimately boosting Malaysia’s economic presence on the global stage.
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