Forest City SFZ gains momentum to attract ‘giant’ investors
03 Feb 2025
The Forest City Special Financial Zone (FC-SFZ) is seeing a surge in interest from prominent companies, signalling its promising trajectory as a burgeoning financial hub.
Eleven companies, including eight family offices from Malaysia, Singapore, Indonesia and Taiwan are keen to establish operations within FC-SFZ.
Among them are logistics giant Tiong Nam Logistics Holdings, developer AME Elite Consortium Bhd and investment firm Wan Li Holdings.
Asset management heavyweights CIMB Group Holdings Bhd and China’s Galaxy Securities Co Ltd have expressed intentions to set up operations in the area.
The SFZ’s strategic focus includes sectors such as banking, financial services, logistics and global services.
Malaysia’s banking giant Malayan Banking Bhd is not hesitating to jump on the bandwagon, aiming to establish itself as the preferred bank for both local and international businesses in the zone.
Maybank president and group chief executive officer Datuk Khairussaleh Ramli said the bank is committed to becoming the preferred financial institution for Malaysia-Singapore financial transactions and solutions, which aims to foster economic integration and bolster regional growth.
Khairussaleh added that Maybank is set to facilitate cross-border trade, fast-track loans and offer seamless financial solutions.
Maybank is also enhancing digital payments and will open a “phygital” branch in Forest City.
With 37 branches in Johor and 18 in Singapore, Maybank has mobilised RM104.89 billion in sustainable finance since 2021. Its shares rose six sen to RM10.16, valuing the bank at RM122.6 billion.
Meanwhile, Johor Menteri Besar Datuk Onn Hafiz Ghazi said to bolster FC-SFZ’s appeal, the federal government has introduced a suite of incentives, including a zero per cent tax rate for single-family offices, a concessionary corporate tax rate between zero and five per cent, and a special individual income tax rate of 15 per cent for knowledge workers and Malaysians opting to work in Forest City.
These measures aim to attract international capital and position Forest City as a preferred investment destination.
Onn Hafiz told Business Times the SFZ will focus on two key sectors mainly banking and financial services and logistics, global services and relocation services.
Banking and financial services, including investments, insurance, financial technology (FinTech), regulatory technology (RegTech) and insurance technology (InsurTech)for both conventional and Islamic banking, will be based on Forest City Island 1.
Logistics, global services, and relocation services will be cantered on Forest City’s mainland, supported by customer support, product development, marketing, finance, and accounting.
The ambitious megaproject Forest City, is a joint venture between Esplanade Danga 88, an affiliate of state government subsidiary Kumpulan Prasarana Rakyat Johor, through a joint venture, Country Garden Holding Ltd (CGPV), with CGPV holding 60 per cent of shares, while KPRJ holds the other 40 per cent.
CGPV deputy president Syarul Izam Sarifudi said Forest City is poised for further economic growth in this year, following its designation as a tax-free zone last November.
Its SFZ, duty-free status and integration with the Johor-Singapore Special Economic Zone (JS-SEZ) are expected to boost Johor’s economy and attract global investors.
To engage stakeholders, Forest City has launched investor seminars, including a recent session on Malaysia’s only zero per cent tax single-family office.
He said pre-bookings for commercial units in Cerulean Bay have also begun, featuring flexible office and retail spaces.
Interest from financial institutions has grown, with a Johor delegation, led by Onn Hafiz’s recent visit to Dubai’s International Financial Centre to gain insights.
Syarul said investors, particularly in artificial intelligence (AI), expressed interest in setting up in the SFZ.
Infrastructure upgrades are also in progress.
Forest City plans to expand transport links, including new weekend and holiday bus services with Causeway Link to Kuala Lumpur, as well as improvements to cycle lanes and connectivity with Johor Baru’s transit system.
“With strategic incentives and global positioning, Forest City is emerging as a key investment hub in Asean, driving job creation and economic expansion,” he said.
Despite these advancements, industry experts have identified areas requiring further enhancement to attract a broader spectrum of investors.
Key concerns include the need for improved infrastructure, enhanced security measures, streamlined customs procedures, currency harmonisation, and the facilitation of free capital movement.
The Malaysian Investment Development Authority reported that connectivity between Malaysia namely Johor and Singapore needed to be further enhanced.
Singapore head of global banking at Maybank Gregory Seow said a clear navigation between state and federal approvals is crucial for seamless project execution.
“Forest City is supposed to be the administrative headquarters, and the authorities are proposing a financial hub. But connectivity is required,” Seow was reported saying.
“Some projects require just Johor state’s approval, some may need federal approval. That complicates the issue. I hope they have navigated those issues back in April. Prime Minister Datuk Seri Anwar Ibrahim also demonstrated his support. Banks like ourselves want to be the go-to bank,” Seow said.
“One of the projects that requires federal approval is Johor’s Autonomous Rapid Transit (ATS) system which is required to link commuters from the Johor-Singapore Rapid Transit System (RTS) that is operational from end-2026.
“More importantly, our Singapore-based clients have signalled interest. Last month, I had a chairman-level lunch with a very established conglomerate in Hong Kong.
“They signalled their interest in obtaining a piece of land in Johor and getting contracts.
“The Chinese companies are debating whether they should go to the Eastern Economic Corridor in Thailand, or here,” Seow said.
“Hopefully we are not let down by the political agenda,” he added.
In September 2024, Finance Minister II Datuk Seri Amir Hamzah Azizan announced a package of incentives to make Forest City a magnet for international capital.
This included attractive rates for single-family offices, concessionary corporate and a special individual income tax rate for knowledge workers and Malaysians who choose to work in Forest City.
Source: NST
