Forest City, Malaysia

ISKANDAR PUTERI: The Forest City Special Financial Zone (FC-SFZ) is drawing attention from several investors, with eleven companies showing interest in setting up operations.

Of the 11, eight are family offices from Malaysia, Singapore, Indonesia, and Taiwan. Logistics firm Tiong Nam Logistics Holdings, developer AME Elite Consortium Bhd, and investment company Wan Li Holdings have also shown interest.

According to the New Straits Times, major financial players including CIMB Group Holdings Bhd and China’s Galaxy Securities Co Ltd have also expressed interest in setting up operations in the FC-SFZ.  Meanwhile, Malayan Banking Bhd (Maybank) is looking to position itself as the main bank for both local and international businesses in the area.

Maybank president and CEO Datuk Khairussaleh Ramli said the bank aims to be the top choice for financial transactions between Malaysia and Singapore, supporting economic ties and regional growth. He added that Maybank will help with cross-border trade, speed up loan approvals, and provide smooth financial services.

Maybank will also set up a “phygital” branch in Forest City to enhance digital payments. The bank is currently valued at RM122.6 billion (S$37.48 billion) and operates 37 branches in Johor and 18 in Singapore. Since 2021, it has channelled RM104.89 billion (S$32.07 billion) in sustainable finance.

Johor’s Chief Minister Onn Hafiz Ghazi said the federal government has introduced incentives to boost FC-SFZ’s appeal. These include a zero per cent tax rate for single-family offices, a concessionary corporate tax rate between zero and five per cent, and a 15 per cent income tax rate for knowledge workers and Malaysians working in Forest City.

The Business Times reported Mr Ghazi said the financial zone will focus on banking and financial services, logistics, global services and relocation services.

Forest City Island 1 will house banking and financial services, including investments, insurance, financial technology (fintech), regulatory technology (RegTech) and conventional and Islamic banking insurance technology (InsurTech). Logistics and global services will be located on the mainland, along with customer support, product development, marketing, finance, and accounting services.

Forest City is a joint venture between Esplanade Danga 88, linked to Kumpulan Prasarana Rakyat Johor (KPRJ), and Country Garden Holding Ltd (CGPV). CGPV holds 60 per cent of the shares and KPRJ 40 per cent.

CGPV deputy president Syarul Izam Sarifudi said Forest City is set for growth after becoming a tax-free zone last November. Its special financial zone, duty-free status, and link to the Johor-Singapore SEZ are expected to boost Johor’s economy and attract investors worldwide.

Forest City has launched investor seminars. Pre-bookings for commercial units in Cerulean Bay have also started.

Johor Chief Minister Onn Hafiz Ghazi’s recent visit to Dubai International Financial Centre (DIFC) was aimed at gaining insights amid growing interest from financial institutions. Mr Syarul Izam said investors expressed interest in setting up operations in the SFZ, particularly those in artificial intelligence (AI).

Infrastructure developments are also underway to support growth. Forest City plans to add weekend and holiday bus services to Kuala Lumpur via Causeway Link, improve cycle lanes, and enhance connectivity with Johor Bahru’s transit system.

While Mr Syarul Izam is optimistic about Forest City becoming a key investment hub, industry experts noted the need for better infrastructure, security, customs procedures, currency harmonisation, and capital movement to attract more investors. The Malaysian Investment Development Authority also mentioned the need for better connectivity between Johor and Singapore.

Gregory Seow, Singapore head of global banking at Maybank, stressed the importance of clear state and federal approvals for projects in Forest City, particularly for connectivity.

He noted that while some projects may just require state permission, others may need federal approval, which can complicate matters. He pointed to the Johor Autonomous Rapid Transit (ATS) system as an example, which will link commuters to the Johor-Singapore Rapid Transit System (RTS) starting in 2026.

He mentioned that Singaporean clients and a Hong Kong conglomerate showed interest in investing in Johor, while Chinese companies are considering either Johor or Thailand for their ventures. “Hopefully, we are not let down by the political agenda,” he added. /TISG

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