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KUALA LUMPUR, March 3 – The government is open to exploring the possibility of establishing special economic zones (SEZs) along Malaysia’s international borders with Kalimantan, Indonesia, but no proposals or discussions have taken place yet, the Economy Ministry said yesterday.
In a Parliamentary written reply to Rodziah Ismail (PH-Ampang), the ministry stated that while there are no immediate plans to replicate the Johor-Singapore Special Economic Zone (JS-SEZ) at other border areas including with Southern Thailand, such initiatives could be considered in the future.
“The government, through the Economy Ministry, has no objections to studying and exploring the proposal to establish an SEZ along Malaysia’s international border with Kalimantan, Indonesia, particularly through the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA) platform,” the ministry said.
Meanwhile, in response to a separate question from Jimmy Puah Wee Tse (PH-Tebrau), the ministry detailed the incentives and measures designed to ensure the success of the JS-SEZ.
It said the JS-SEZ offers several tax incentives effective from January 1, 2025. These include:
- A special corporate tax rate of 5 per cent for up to 15 years for companies investing in eligible manufacturing and service activities, such as AI and quantum computing supply chains, medical devices, aerospace manufacturing, and global service hubs.
- Additional customised incentives for businesses operating in key flagship development zones within JS-SEZ.
- A special 15 per cent tax rate for eligible knowledge workers employed in JS-SEZ for 10 years.
Additionally, it said the Johor state government has agreed to introduce lower entertainment duties starting January 1, 2025, to support economic activities in the SEZ.
In January, Malaysia and Singapore formalised the agreement of the JS-SEZ during the 11th Malaysia-Singapore Leaders’ Retreat to boost economic cooperation and attract investments.
The JS-SEZ is a mega development project covering areas such as the Iskandar Development Region, Desaru, Johor Bahru, Iskandar Puteri, Tanjung Pelepas, Tanjung Bin, Pasir Gudang, Senai, Skudai and Sedenak.