“Economists highlight the Johor-Singapore Special Economic Zone’s (JS-SEZ) potential to boost jobs and growth, stressing the need for tax incentives, infrastructure upgrades, and investor-friendly policies to attract investments.“
Kuala Lumpur, 08th Jan 2025, 01.25pm – The Johor-Singapore Special Economic Zone (JS-SEZ) is set to boost employment and economic activity in Johor, but economists emphasize the need for clear tax incentives and robust infrastructure development to attract investors.
OCBC senior ASEAN economist Lavanya Venkateswaran expects Malaysian authorities to unveil a tax incentive package, potentially including special corporate tax rates for new investments. “Such details are crucial for investors to evaluate the JS-SEZ’s attractiveness,” she stated.
In addition to the Johor-Singapore Rapid Transit System (RTS) Link, slated for completion by 2026, Lavanya stressed that improvements in Johor’s road, bus, and rail infrastructure are essential to enhancing the region’s appeal. She also highlighted the importance of the Invest Malaysia Facilitation Centre-Johor (IMFC-J) in sustaining momentum for the initiative.
“We remain optimistic about the JS-SEZ’s prospects,” Lavanya said, describing it as a work-in-progress initiative that will adapt to meet investor needs.
MIDF Research predicts the JS-SEZ will generate increased business activity, leading to better employment opportunities. “This will likely spur consumption, benefiting small and micro businesses as the population in the region grows,” the firm noted.
Maybank Investment Bank highlighted the JS-SEZ’s potential to combine Johor’s competitive land, labour, and energy costs with Singapore’s expertise in finance and logistics, presenting a strong alternative to North Asian supply chains amid US-China trade tensions.
The JS-SEZ agreement, signed by Malaysian Prime Minister Datuk Seri Anwar Ibrahim and Singapore Prime Minister Lawrence Wong, aims to strengthen trade, promote technology transfer, and create 20,000 skilled jobs within its first five years.
Key Beneficiaries Across Sectors
MIDF identified five key sectors poised to benefit:
- Property Development: Stocks like Mah Sing Group Bhd and Matrix Concepts Holdings Bhd are expected to gain from improved buyer sentiment and catalysts such as the JS-SEZ and RTS.
- Construction: Companies like Gamuda Bhd and IJM Corp Bhd stand to benefit from major infrastructure projects, including the RTS and potential Johor Bahru Light Rail Transit (LRT).
- Utilities: Samaiden Group Bhd and Sunview Group Bhd could gain from the growing demand for renewable energy in Johor.
- Oil & Gas: Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) is well-positioned, with its strong order book and focus on renewable energy and LNG carriers.
- Logistics: Swift Haulage Bhd, a leader in container haulage and freight forwarding in Johor, could see growth with increased trade activity in the region.
The JS-SEZ is strategically located along a key maritime trade route, benefiting energy and logistics sectors, including Johor’s ports and the Pasir Gudang hub for shipbuilding and maritime solutions.
As infrastructure projects like the East Coast Rail Link and the RTS advance, economists remain optimistic about the JS-SEZ’s transformative potential for Johor and beyond.
