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The main steps to buy a factory in Johor are: set your budget and loan, shortlist the right type and area, let your lawyer check the title and land use, pay a 2–3% booking deposit, sign the Sale and Purchase Agreement (SPA) with the balance of 10%, and complete the purchase within three months (plus a one-month extension if needed). Foreign buyers add one more step: state consent, which is applied for after the SPA and usually takes about three months before the completion period starts.
This guide walks through each step, the costs you should budget for, and the extra rules for foreign buyers, who make up a large share of factory buyers in Johor today.
Step 1: Set your budget and talk to the bank early
For a Malaysian buyer or a Malaysian company, banks usually finance 70–80% of the price of an industrial property, with a loan tenure of up to 20–25 years. That means you need at least 20–30% of the price in cash, plus the costs listed further below.
Loan approval depends on your company’s financial statements, the age of the building and the tenure left on the title. A factory on a leasehold title with few years remaining can be harder to finance. Foreign buyers should expect a lower margin from Malaysian banks, and it varies from bank to bank.
👉 Get a loan eligibility check from your bank before you pay any deposit, so you know your real budget.
Step 2: Choose the right factory type and area
The type of factory decides your space, loading access and price. In Johor you will mostly see four types:
- Detached factory: a stand-alone building on its own land, with space around it for trucks, parking and future extension.
- Semi-detached factory: shares one wall with a neighbour, with a good balance of land and price.
- Cluster factory: a smaller unit in a group, often with a shared road for loading.
- Terrace factory: a row unit and the most affordable way to own a factory.
Location matters just as much. Senai and Kulai are close to Senai Airport and the North–South Expressway. SILC and Gelang Patah are near the Second Link to Singapore and Port of Tanjung Pelepas. Pasir Gudang suits heavier industry that needs Johor Port. If you plan to build your own factory, look at industrial land for sale instead. To compare the main parks area by area, see our guide to industrial parks in Johor.
Step 3: Check the title, land use and licences
This is the step that protects your money. Before you sign anything, your lawyer searches the land title and checks that the factory can legally be used for your business. The main points are:
- Tenure: freehold, or leasehold and how many years are left.
- Category of land use: the title should be for industrial use. The express condition may also limit it to light, medium or heavy industry.
- Restriction in interest: some titles need state consent before they can be sold, or can only be sold to Bumiputera buyers.
- Encumbrances: whether the property is charged to a bank or has a caveat on it.
- Building approvals: the Certificate of Completion and Compliance (CCC) or Certificate of Fitness (CF).
The goal is simple: the factory you buy must be one you can actually move into, operate and get your business licence for from the local council. Some industries also need approval from the Department of Environment. Check the power supply too. If your machines need more electricity than the building has, an upgrade costs time and money.
👉 Tell your agent and lawyer exactly what you will produce in the factory. The same building can be fine for one industry and unsuitable for another.
Step 4: Pay the booking deposit (2–3%)
Once you and the seller agree on the price, you sign a Letter of Offer and pay an earnest deposit, usually 2–3% of the price. This takes the factory off the market while the lawyers prepare the SPA. The Letter of Offer should state the price, the deposit, the completion period and any conditions, such as the sale being subject to your loan approval.
Step 5: Sign the Sale and Purchase Agreement (10%)
When you sign the SPA, you pay the balance to make up 10% of the price. The SPA sets out the completion date, who pays for which costs, the consents that must be obtained and what happens if either side cannot complete. Read the conditions carefully, especially if the sale depends on state consent or on your loan.
Step 6: Get state consent (foreign buyers)
A foreign buyer, or a foreign-controlled company, needs consent from the Johor state authorities before the factory can be transferred. The consent can only be applied for after you have paid the deposit and signed the SPA, because the application is made on the signed agreement. Approval usually takes about three months.
The three-month completion period in the next step only starts after the consent is approved. This is the same whether you take a bank loan or pay in cash. So for a foreign buyer, the timeline after signing the SPA is roughly three months for consent, then three months (plus one if extended) to complete.
Some titles also have a restriction in interest that needs state consent even when the buyer is Malaysian. How long this takes varies, so your lawyer will advise you on the timing.
Step 7: Complete the purchase and get the keys
Completion is usually three months, with a one-month extension if needed. For Malaysian buyers this counts from the SPA date. For foreign buyers it counts from the date state consent is approved. During this time your bank releases the loan and you pay the remaining 90%. The Memorandum of Transfer (MOT) is then stamped and registered at the land office. After full payment, the seller hands over vacant possession and the keys.
What does it cost to buy a factory in Johor?
On top of the purchase price, budget for these main costs:
| Cost | How it is calculated |
|---|---|
| Stamp duty on the MOT (Malaysians and Malaysian companies) | 1% on the first RM100,000, 2% on the next RM400,000, 3% on the next RM500,000 and 4% above RM1 million |
| Stamp duty on the MOT (foreign companies and non-citizens) | Flat 4% of the price or market value, whichever is higher |
| Stamp duty on the loan agreement | 0.5% of the loan amount |
| Legal fees for the SPA and loan | Set by the Solicitors’ Remuneration Order scale, plus disbursements |
| State approval levy (foreign buyers only) | Industrial property in Johor: 4% of the price or valuation (from 1 July 2025) |
| Quit rent and assessment | Shared between buyer and seller from the completion date |
Example: for a RM3,000,000 factory bought by a Malaysian company, stamp duty on the MOT is RM104,000 (RM1,000 + RM8,000 + RM15,000 + RM80,000). A foreign buyer pays RM120,000 in stamp duty (4%), plus the state approval levy of about RM120,000.
The 8% stamp duty rate for foreign buyers that started on 1 January 2026 applies to residential property only, not to factories, according to law firm Skrine. Tax rules change often, so always ask your lawyer for the current figures before you sign.
Buying a factory in Johor as a foreigner
Foreign buyers, especially from Singapore and China, are very active in the Johor industrial market. Foreigners can buy factories in Johor, but there are extra steps:
- State approval is required. This applies to foreign individuals and foreign companies, whether they pay cash or take a loan. It is applied for after the SPA is signed and usually takes about three months. A Malaysian-registered company in which foreigners hold more than half of the voting shares is usually treated as foreign too.
- A state levy is charged. From 1 July 2025, the levy for industrial property is 4% of the price or valuation, up from 2% before (see the summary by L & Co Accountants).
- Minimum prices apply. The state sets minimum purchase prices for foreigners, and they differ by property type and area, so check the current figure for the factory you want.
- Bumiputera lots are not available. In a new project, some units may be reserved for Bumiputera buyers. If they remain unsold, the developer can apply to release them, and they can then be sold to non-Bumiputera buyers.
- Tax when you sell. Foreign owners pay Real Property Gains Tax (RPGT) of 30% on the gain if they sell within five years, and 10% from the sixth year.
If you are setting up manufacturing in Malaysia, MIDA (Malaysian Investment Development Authority) can advise on manufacturing licences and investment incentives, which often go hand in hand with buying your factory.
👉 Foreign buyers should plan for about six to seven months from signing the SPA to getting the keys: around three months for state consent, then three months (plus one if needed) to complete.
Freehold or leasehold: which should you buy?
Freehold factories have no expiry date and usually keep their value better. They are also easier to finance and resell. Leasehold factories, often 60 or 99 years, are common in state-developed industrial parks and are usually cheaper. When the remaining lease gets short, banks lend less and buyers become fewer, so check how many years are left. Also check whether you will need consent to sell or charge the property later.
Buying from a developer vs buying a subsale factory
A new factory from a developer is paid in stages as construction progresses, so you have time to arrange your finances, but you wait for the building to be completed. A subsale (secondary market) factory is ready now. You can inspect the real building and power supply, and you can usually start operating soon after completion. Most business owners who need space quickly choose a subsale factory.
Frequently asked questions
How long does it take to buy a factory in Johor?
For a Malaysian buyer, usually three to four months from signing the SPA: three months to complete plus a one-month extension. For a foreign buyer, state consent comes first and usually takes about three months after the SPA is signed. The three-plus-one-month completion period then starts from the approval date, so the whole process is about six to seven months.
How much deposit do I need to buy a factory?
Usually 10% of the price: 2–3% when you sign the Letter of Offer and the balance when you sign the SPA. The bank loan covers the rest up to its margin, usually 70–80% for Malaysian buyers, so you pay any remaining amount in cash.
Can a Singaporean buy a factory in Johor?
Yes. Singaporeans and other foreigners can buy industrial property in Johor with state approval. They pay a state levy and 4% stamp duty on the transfer, and they cannot buy Bumiputera lots.
Who checks that the factory can be used for my business?
Your lawyer checks the title, land use category and restrictions, and your agent helps you confirm the building’s power supply, approvals and layout. Tell both of them what your business does before you pay the deposit.
Ready to start?
Browse our factories for sale in Johor to see what is available now, or read our Johor industrial outlook for 2026 to understand where the market is heading. If you would like help with a shortlist, viewings or the buying process, contact Jimmy Toh. We reply to every enquiry on the same day.
This guide is general information, not legal or tax advice. Rules and rates change, so please confirm the details with your lawyer and bank before you buy.
