What is the Johor-Singapore Special Economic Zone?

The Johor–Singapore Special Economic Zone (JS-SEZ) is a cross-border initiative designed to create one of Southeast Asia’s most dynamic business environments. For Danish companies looking to expand into Asia, the JS-SEZ offers a unique combination of Singapore’s global connectivity and financial infrastructure with Johor’s growing industrial capacity and cost advantages.

This zone presents a strategic opportunity to tap into regional markets, access special investment incentives, and become part of an integrated economic corridor at the heart of ASEAN.

The initiative is intended to strengthen the economic integration between Singapore and Malaysia, offering a framework that makes it easier to do business across the border. With enhanced connectivity and smoother operations, Johor is expected to become a key gateway to ASEAN.

Companies operating within the JS-SEZ will benefit from:

• Streamlined movement of goods and people across land checkpoints.

• Eased regulations and faster approvals via Malaysia’s new one-stop investment centre in Johor.

• Access to talent and skills programmes, including vocational training and partnerships with local authorities for local employment.

• Attractive tax and incentive schemes for foreign investors, including:

  • Special corporate tax rates

  • Reduced income tax for knowledge workers

  • Entertainment duty reductions[1]

The SEZ is also open to European and global investors, which makes it an accessible and competitive entry point for Danish companies in sectors like manufacturing, renewable energy, health tech, and more. In 2023, the state of Johor attracted RM31 billion in foreign direct investment, with Singapore and the United States as the top investors in its manufacturing sector [2].

The manufacturing sector within the JS-SEZ is a key focus area, offering strong alignment with Denmark’s expertise in automation, clean technologies, and industrial innovation. In addition, Johor’s ongoing infrastructure development opens up significant collaboration opportunities for Danish companies in engineering, logistics, and digitalisation.

The JS-SEZ spans nine economic zones and prioritizes 11 key sectors:

Source: Ministry of Economy Malaysia, compiled by BT

The sectors include manufacturing, logistics, food security, tourism, energy, digital economy, green economy, financial services, business services, education and health.

Making it Easier to do Business: Investment Support and Legal Framework

Malaysia has set up the Invest Malaysia Facilitation Centre – Johor (IMFC-J) to help foreign businesses navigate federal and state-level regulations. This aims to eliminate long approval times and reduce bureaucratic hurdles, a key issue in previous cross-border projects.

The Malaysian legal system applies within the zone, and it ensures investment protection and dispute resolution mechanisms, adding a layer of legal security for foreign businesses.

Danish companies with an eye on Asia should watch this development closely. With a focus on regional proximity, growth potential, and a favourable business climate, the JS-SEZ could represent an interesting new platform for expansion.

Are you interested or want to know more?

Contact Mark Perry, Head of Trade, Embassy of Denmark in Malaysia at markpe@um.dk or Rasmus Bjoernoe, Head of Trade, Embassy of Denmark in Singapore at rasbjo@um.dk

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References:

[1] ASEAN Briefing

[2] Ministry of Trade and Industry (MTI) Singapore