Malaysia’s Forest City has taken a significant step forward in its economic revitalization efforts, with two family offices officially approved to operate within its newly established Special Financial Zone (SFZ). CMY Capital Family Office and Yow Kee Family Office, both Malaysian-based, have become the first investors to receive regulatory clearance under the initiative designed to strengthen Johor’s economic ties with Singapore. The development signals growing momentum for the Johor-Singapore Special Economic Zone (JS-SEZ), which aims to position the region as a competitive investment hub through tax incentives and streamlined processes.
The SFZ offers substantial financial benefits, including corporate tax rates as low as zero percent for qualifying family offices managing at least RM30 million in assets. Knowledge workers stand to benefit from a flat 15 percent income tax rate, while corporate investors may access a reduced 5 percent tax rate for up to 15 years. These incentives, currently under finalization by Malaysia’s Finance Ministry, are being fast-tracked on a case-by-case basis to attract early adopters. Johor authorities have also established a dedicated facilitation center, handling over 250 investor inquiries since January to simplify regulatory approvals.
Forest City, a joint venture between China’s Country Garden and Johor-backed Esplanade Danga 88, has faced setbacks since its inception a decade ago, including financial instability and pandemic-related delays. Originally envisioned as a thriving residential and commercial hub, the project currently has an occupancy rate of just 1 percent. However, the SFZ initiative has renewed optimism, with 30 additional firms from Malaysia, Singapore, and Thailand expressing interest in establishing operations. Analysts suggest the zone’s tax structure rivals those of Thailand’s Eastern Economic Corridor and Indonesia’s Batam Free Trade Zone.
Experts highlight Johor’s strategic advantages, including its proximity to Singapore and ongoing infrastructure investments, as key factors in its growing appeal. UOB Malaysia senior economist Julia Goh noted that the SFZ’s talent-focused tax policies align with those of financial centers like Singapore and Hong Kong. With further refinements expected, the JS-SEZ could emerge as a major driver of regional investment. The early success of the SFZ marks a potential turning point for Forest City, offering a new pathway for growth after years of stagnation.