The Johor-Singapore Special Economic Zone (JS-SEZ) represents a significant joint undertaking between Malaysia and Singapore, designed to attract and facilitate investments across 11 diverse sectors. This ambitious project spans an impressive 3,571 square kilometers, encompassing nine flagship areas to cater to various economic activities. The JS-SEZ aims to leverage the economic strengths of both Singapore and Malaysia's Klang Valley, providing a strategic buffer against global trade tensions, particularly between the United States and China.
Johor's Chief Minister, Onn Hafiz Ghazi, expressed confidence in the JS-SEZ's potential to mitigate trade concerns. He emphasized the diversity of industries within the zone, which includes manufacturing, logistics, food security, tourism, energy, the digital economy, the green economy, financial services, business services, education, and health. By diversifying into multiple industries, the JS-SEZ aims to manage global uncertainties effectively.
“I think if you look at the sectors, there is a clear show that we are diversifying into lots of industries, I think that should help manage the uncertainties that's happening in the world,” said Onn Hafiz.
The JS-SEZ offers a range of compelling incentives to attract international firms and investors. Companies engaged in high-value activities such as artificial intelligence and aerospace manufacturing can benefit from a 5% tax rate for 15 years. Additionally, eligible knowledge workers will enjoy an income tax rate of 15% for a decade. These fiscal incentives are designed to make the zone an attractive destination for businesses worldwide.
“The first step is to promote the JSSEZ initiatives … these are very attractive fiscal and non-fiscal incentives … now is the time to ensure we implement them,” Onn Hafiz stated.
The demand for data centers in Johor is on the rise, driven by persistent global needs for data services. Starting salaries for diploma holders in these centers begin at RM4,000 (US$900), with degree holders earning RM5,000. Onn Hafiz highlighted the increasing interest from countries such as the US, China, and Australia in establishing data centers within the region.
“At the moment, the demand (to build more) data centres in Johor is huge, there are requests from US, China, Australia and quite frankly, this demand is getting higher,” remarked Onn Hafiz.
To support this growth, Johor is enhancing its talent pool by collaborating with over two dozen universities and more than 100 technical training institutions. These efforts aim to equip Johoreans with the necessary skills and qualifications to meet the demands of an evolving workforce.
“And at the same time, we are putting a lot of effort when it comes to (developing) our talents. And I think by having a resilient workforce, by giving them proper training and education, we should be able to embrace (the challenges of a global trade war) quite well,” Onn Hafiz explained.
Connectivity between Johor and Singapore is set to improve significantly with the introduction of the Rapid Transit System (RTS) Link by the end of 2026. This initiative will transport up to 10,000 passengers each hour in both directions in just five minutes. The RTS Link is expected to alleviate traffic congestion on the Causeway by reducing reliance on road transport.
“That to me, will also be a game-changer because once they start implementing it for the cars, I believe that the congestion will automatically be reduced because it will reduce … human error,” said Onn Hafiz.
Johor's ambitions extend beyond economic collaboration. The state aims to become Malaysia's most developed state by 2030. With a record RM2.1 billion in net earnings for 2024 and plans to reach RM2.5 billion in subsequent years, Johor is on a promising trajectory towards achieving this goal.
“If we do not deliver, I fear we cannot achieve our ambitious goal. And this is not something that I personally came up with alone. It's also with the decree of the King and the Regent of Johor,” stated Onn Hafiz.
The Invest Malaysia Facilitation Centre in Johor is set to open by the end of February, further promoting ease of doing business within the zone. This center will streamline investment processes and foster an environment conducive to business growth.
“Right now it's not a major concern, but we will monitor as it goes,” commented Onn Hafiz regarding potential challenges.
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