Invest Malaysia (IM) Iskandar 2024, held for the first time in Iskandar Puteri, Johor on 26 Sep, saw participation from over 500 delegates, including foreign institutional investors. This year’s IM theme was the upbeat “Where Policy Meets Progress”, with PM Anwar delivering the Keynote Address, while Johor Chief Minister (CM) Onn Hafiz delivered a Special Address. These were followed by conversations on key FDI/DDI-boosting topics such as the GEAR-uP initiative, JohorSingapore Special Economic Zone (JS-SEZ) and Forest City Special Financial Zone (FC-SFZ). Recall the FC-SFZ is being jump-started with a slew of incentives, including tax rate of 0%-5% for businesses, a flat 15% individual income tax for knowledge workers and Malaysians, and zero tax rate for family offices. If well executed, developers ECW, SPSB, SWB and UEMS are poised to benefit from the spillover of rising investment and job opportunities in the FC-SFZ over the longer term.

Reinforcement of the current investment upcycle is dependent on federal support. PM Anwar, while conceding Malaysia had endured excesses in the past, reassured investors his administration will ensure good governance and remain consistent in tackling corruption for better efficiency, transparency and ease of doing business. In emphasizing the need for knowledge workers, the government intends to work together with the private sector to better align requirements and pain points, including more effective management of Technical and Vocational Education and Training (TVET), while also exploring policy changes e.g. easing the process for qualified foreign grads of local unis to stay on to work in JS-SEZ / Malaysia. At the state level, the CM articulated Johor’s continually improving connectivity as a key draw for FDI/DDI, along with collaboration with federal authorities per the FC-SFZ and setting up of Invest Malaysia Facilitation Centre Johor (IMFC-J), the first IMFC outside of KL.

The JS-SEZ panel discussion noted the establishment of the IMFC-J is defined in the JS-SEZ agreement – thus, ease of doing business in the JS-SEZ is “an obligation, not an option”. The centre will comprise of representatives from MIDA, IRDA and state agencies at the front end, and local councils at the back end. Work processes for the various local councils covering the JS-SEZ will be streamlined and dedicated account managers will be assigned to investors. Among other key enablers, resource planning (e.g. for DCs) needed to be harmonized between federal and state, while immigration policies pertaining to movement of people/talent into the SEZ needed to be welcoming.

Source: Maybank Research - 16 Oct 2024