Written by PropertyGenie Team
The Malaysian government has announced a comprehensive package of incentives aimed at transforming the Forest City Special Financial Zone (FCSFZ) into a leading financial hub in the ASEAN region. The announcement was made today by YB Senator Datuk Seri Amir Hamzah Azizan, Malaysia’s Second Minister of Finance, during a special event attended by Duli Yang Amat Mulia Tunku Mahkota Ismail, the Regent of Johor.
The FCSFZ offers an attractive opportunity for both local and international businesses to thrive in a rapidly evolving financial ecosystem. Here are the key highlights of the incentives package:
0% to 5% Corporate Tax: Businesses operating within the FCSFZ will benefit from a significantly reduced corporate tax rate, ranging from 0% to 5%, positioning it as one of the most favorable tax environments in the region.
15% Personal Income Tax: To attract top talent, both locally and internationally, knowledge workers in the FCSFZ will enjoy a special 15% personal income tax rate. This includes professionals from finance, technology, and other high-value sectors, ensuring the zone remains an attractive destination for global talent.
First in Malaysia: Forest City is set to become the first location in the country to offer a 0% tax rate for the establishment and operation of Single Family Offices.
Launch Timeline: The Single Family Office Scheme, coordinated by the Securities Commission Malaysia, is expected to be operational by the first quarter of 2025.
5% Tax Rate: Fintech companies and foreign payment system operators setting up in the zone will benefit from a reduced tax rate of 5%, fostering innovation and growth in the financial technology sector.
Industry Incentives: Companies in the shared services sector, including insurance and other financial services, will receive incentives to establish their operations in Forest City.
Relocation and Operational Incentives: Banking institutions, insurance companies, and capital market intermediaries will enjoy special deductions on relocation costs, enhanced industrial building allowances, and exemptions from withholding tax.
Regulatory Flexibilities: Simplified procedures for opening additional branches and foreign exchange flexibilities for offshore borrowing and investment in foreign currency assets.
Strategic Development: Forest City is poised to become a regional hub for digital payment solutions, aligning with the Malaysia Digital Economy Blueprint and tapping into the growing e-payment adoption in the region.
The government envisions Forest City as a catalyst for economic growth in southern Malaysia. The FCSFZ is expected to create high-value jobs, enhance investment, and contribute to sustainable development across various sectors.
The establishment of the FCSFZ is a significant step towards realizing the aspirations of the MADANI Economic Framework, which aims to position Malaysia as a leading Asian economy.
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