Malaysia and Singapore to Finalise Johor-Based Special Economic Zone in September

Malaysia and Singapore are close to finalising an agreement to create Southeast Asia's first cross-border Special Economic Zone (SEZ), designed to attract investments and stimulate economic growth. Economy Minister Rafizi Ramli announced that the two countries are in the final stages of preparation, with plans to sign the deal by September. Johor Chief Minister Onn Hafiz Ghazi confirmed that the geographic scope of the zone is nearly finalized. The SEZ will enable the free movement of goods and people between Johor and Singapore.

Initiated in January, the SEZ agreement is set to be formalised before the year-end retreat involving Malaysian Prime Minister Anwar Ibrahim and Singaporean Prime Minister Lawrence Wong. Malaysia has submitted its proposals and is awaiting Singapore's response. Ramli mentioned that Malaysia will offer fiscal incentives for companies operating within the SEZ, with details to be disclosed in the upcoming budget speech.

The Johor-Singapore SEZ is expected to cover an extensive area of 3,505 sq km, surpassing the size of Shenzhen's SEZ. It will include 16 economic sectors, such as electronics, manufacturing, and healthcare. This initiative builds on Johor's existing investments, including data centres by Microsoft and Nvidia and the energy complex by Singapore’s ChemOne in Pengerang. Furthermore, the SEZ is expected to gain significantly from a proposed high-speed rail project connecting Kuala Lumpur and Singapore.

The Singapore Business Federation will hold a forum on the SEZ for potential investors, with participation from Singapore's trade ministry. This collaboration highlights the SEZ's role in strengthening bilateral economic ties and leveraging the strategic advantages of Johor and Singapore.