JOHOR BARU: Industry players are buzzing over Johor’s economic outlook following the announcement of tax incentives for the Forest City Special Financial Zone (SFZ).
Olive Tree Property Consultants Sdn Bhd chief executive officer Samuel Tan said the incentive packages come at a good time as the family office sector, as well as fintech (financial technology), shared services and digitalisation are the way forward.
“This is a good initiative with a tax regime starting from 0%, but more details on the grounds of qualification are needed.
“What is needed is the legal framework to ensure efficiency and transparency,” he said.
ALSO READ: What's a single family office?
Tan added that the ecosystem must be right to attract knowledge workers to Forest City on top of the special income tax rate of 15% being offered.
“Apart from attracting knowledge workers from abroad, upskilling and reskilling of the existing pool of local talent is important as part of the talent retention initiative.
Strategic move: Johor Regent Tunku Ismail Sultan Ibrahim (centre) officiating the Forest City SFZ tax incentive announcement ceremony while Amir Hamzah (right) and Johor Mentri Besar Datuk Onn Hafiz Ghazi look on in Iskandar Puteri. — THOMAS YONG/The Star
“A lower tax itself is insufficient if the quality of living is not up to expectations,” he said.
In this regard, Tan said stakeholders must ensure that the Forest City SFZ offers an environment that people find safe, convenient and efficient in carrying out their work.
ALSO READ: Wooing the wealthy with lucrative tax packages
“Beyond the SFZ, the authorities should consider widening its scope in the upcoming Johor-Singapore Special Economic Zone (JS-SEZ) where more players can invest,” he said.
“It will make Forest City more vibrant with diverse supporting industries and services.”
Yesterday, Finance Minister II Datuk Seri Amir Hamzah Azizan announced a package of incentives to make Forest City a magnet for international capital.
ALSO READ: Forest City first location in Malaysia to offer zero tax rate for family offices
This includes a 0% tax rate for single-family offices, a concessionary corporate tax rate between 0% and 5%, and a special individual income tax rate of 15% for knowledge workers and Malaysians who choose to work in Forest City.
Meanwhile, Johor Real Estate Housing Developers Association chairman Lindy Tan said the Forest City SFZ would complement the upcoming JS-SEZ deal, which is expected to be signed between Malaysia and Singapore soon.
ALSO READ: Forest City SFZ incentives will boost Malaysia too, says MB Onn Hafiz
“With both financial and economic zones in place, Johor is set to become the next growth centre in the country,” she said.
She is also looking forward to more good news come November as that is when the JS-SEZ is expected to be announced by the government.
“November will be the month to watch for not only Johoreans but also Malaysians.
ALSO READ: Malaysia to offer tax breaks, incentives in Forest City development to boost investments
“Along with the SFZ, the JS-SEZ will further boost Johor’s economic growth and strengthen its position as one of the most preferred investment destinations in the region,” said Tan, without elaborating further.
The JS-SEZ agreement is expected to be concluded by year-end, following extensive negotiations between the Malaysian and Singaporean governments.
It is designed to cover strategic areas in Johor and aims to leverage the close proximity and economic ties between Johor and Singapore.
The zone is expected to attract significant foreign direct investment, particularly in industries such as technology, finance, and advanced manufacturing.
