1. Tax relief opportunities

The most immediate impact comes from tax relief measures to help lower operating costs for businesses.

For large-scale investments, companies investing in innovative sectors such as artificial intelligence, quantum computing, medical devices, and aerospace manufacturing can access a preferential 5 per cent corporate tax rate for a period of up to 15 years.

To complement this, the zone introduced a competitive 15 per cent personal income tax rate for eligible knowledge workers, valid for a decade. Additionally, reduced entertainment duties, effective January 2025, are set to catalyse investments in the tourism and leisure sectors.

2. Enhanced cross-border connectivity

Transportation infrastructure is expected to undergo a major upgrade under the JS-SEZ agreement, addressing long-standing challenges in cross-border operations.

A QR code-based system will enable passport-free clearance at Johor land checkpoints for Singaporeans and other foreign travellers by mid-2025, significantly reducing transit times. The initiative extends to cargo movement, with the implementation of digitised clearance systems at land checkpoints.

Perhaps the most anticipated development is the Johor Bahru-Singapore Rapid Transit System Link, scheduled for completion by the end of 2026. Furthermore, the Malaysian government is exploring plans to develop either a light rail transit system or a tram-bus network within Johor Bahru to address local congestion issues and improve connectivity within the city.

3. Access to skilled workforce

The JS-SEZ agreement places strong emphasis on workforce development through various upskilling initiatives.

For businesses, this means access to a growing pool of skilled professionals at competitive wage rates in Johor, offering an attractive alternative for companies looking to optimise their operational costs while maintaining high-quality standards.

Technical and vocational education and training partnerships have been established between institutions from both countries. These include collaborations between Singapore Polytechnic and the Federation of Malaysian Manufacturers, as well as Singapore’s ITE Education Services and the Johor Skills Development Centre.

These partnerships aim to develop a robust pipeline of trained professionals, ensuring that businesses will have ready access to workforce talent to meet their needs.

SMEs that tap on the comparative advantages of the two cities will be best placed to reap the benefits of the JS-SEZ agreement.

"As a bank committed to fostering economic growth and regional collaboration, the JS-SEZ presents a tremendous opportunity for businesses on both sides of the border to thrive,” said Mr Alvin Lee, Country CEO of Maybank Singapore.

“We will continue to provide an ecosystem of comprehensive financial solutions, resources, and expertise to help companies succeed within the SEZ.”