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The Johor–Singapore Special Economic Zone (JS-SEZ) covers about 3,588 sq km of southern Johor: all of Iskandar Malaysia plus Pengerang. Malaysia and Singapore signed the agreement on 7 January 2025. Inside it are nine flagship areas, and each one has its own tax incentives. The headline incentives are a 5% corporate tax rate for up to 15 years for large new investments in selected industries, and a 15% flat income tax for 10 years for qualifying knowledge workers. Companies can apply to MIDA from 1 January 2025 to 31 December 2034.
This guide covers the map of the nine flagship areas, what each incentive needs, which industrial areas are inside the zone, and what it means if you are buying or renting a factory in Johor. The figures come from the official incentive package published by MIDA and the Ministry of Finance, as of October 2026.
What is the JS-SEZ?
The JS-SEZ is a joint plan by Malaysia and Singapore to bring more investment into southern Johor by making it easier to move goods, people and money across the border. According to the official JS-SEZ website, it covers Iskandar Malaysia (about 2,300 sq km) and Pengerang (about 1,288 sq km) and promotes 11 sectors: manufacturing, logistics, financial services, business services, digital economy, tourism, food security, health, education, energy and green economy.
The two governments target 50 projects in the first five years, 100 within ten years, and 20,000 skilled jobs. Malaysia reported RM132 billion of investments in the JS-SEZ from 2025 to June 2026. The JS-SEZ master plan and investment blueprint were due in March 2026 but were postponed; the government now expects to launch them by the end of 2026.
JS-SEZ map: the nine flagship areas
Each flagship area has a lettered name. The table shows what each one is for and the related pages on this website.
| Flagship area | Focus | Industrial property nearby |
|---|---|---|
| A: Johor Bahru city centre (waterfront) | Global services hubs | Johor Bahru, Tampoi |
| B: Iskandar Puteri | Global services hubs | Iskandar Puteri, data centre land in Nusajaya Tech Park |
| C: Tanjung Pelepas | Smart logistics, port | Gelang Patah, SILC, bonded warehouses near PTP |
| D: Tanjung Langsat – Kong Kong | Downstream and specialty chemicals | Tanjung Langsat, Pasir Gudang |
| E: Senai – Skudai | Aerospace manufacturing and MRO | Senai, Senai Airport City |
| F: Kulai – Sedenak | AI and quantum computing supply chain, medical devices, pharmaceuticals | Kulai, Seelong, Sedenak Tech Park land |
| G: Desaru – Penawar | Integrated tourism | Kota Tinggi |
| H: Pengerang | Petroleum and petrochemicals (PIPC) | Pengerang Integrated Petroleum Complex |
| I: Forest City | Special Financial Zone | freehold land near Forest City |
Being inside the JS-SEZ is not the same as being inside a flagship area. Most of the industrial areas around Johor Bahru, including Senai, Kulai, Seelong, Pasir Gudang, Tanjung Langsat, Ulu Tiram, Desa Cemerlang and Gelang Patah, are within Iskandar Malaysia and so within the JS-SEZ. The special tax rates, however, are tied to the activity and to the flagship area named for it. Exact boundaries will be clearer when the master plan is published.
JS-SEZ tax incentives
The incentive package was announced on 8 January 2025 (Ministry of Finance). The details below are from MIDA’s JS-SEZ incentive snapshot.
| Activity | Incentive | Main conditions | Flagship |
|---|---|---|---|
| Manufacturing: AI and quantum computing supply chain, medical devices, pharmaceuticals, aerospace and MRO | 5% tax for 15 years (capital investment above RM1 billion) or 10 years (RM500 million to RM1 billion) | New company, new investment; land not counted. An existing company bringing a new business segment from overseas (above RM500 million) gets a 100% Investment Tax Allowance for 5 years instead | E and F |
| Global services hub (regional P&L, business planning, treasury) | 5% tax for up to 15 years | Yearly operating spending of at least RM50 million, at least 10 network companies, sales of at least RM500 million | A and B |
| Smart logistics complex (regional distribution, integrated logistics, dangerous goods, cold chain) | 100% Investment Tax Allowance for 5 years | Capital investment of at least RM500 million; warehouse complex of at least 50,000 sq m (about 538,000 sq ft); at least 80% Malaysian workforce | C |
| Downstream specialty chemicals | 5% or 10% tax for up to 10 years, or an Investment Tax Allowance | Capital investment of at least RM500 million; paid-up capital of at least RM2.5 million | D |
| Integrated tourism | 100% Investment Tax Allowance for 5 years | Capital investment of at least RM500 million; hotel of at least 80 rooms plus an attraction | G |
| Renovation of business premises | Accelerated capital allowance (20% initial, 40% yearly) | Company already approved for a tax incentive between 2025 and 2034; can be used once | A to G |
| Commercial property purchase | 40% stamp duty exemption | Commercial property that was still unsold on 31 December 2024 | A and B |
Applications go to MIDA online through InvestMalaysia, and the Invest Malaysia Facilitation Centre Johor (IMFC-J), run with IRDA, handles the investment process in Johor. Incentives are approved case by case.
15% income tax for knowledge workers
Knowledge workers in any flagship area can pay a flat 15% tax on their employment income for 10 years. MIDA lists these conditions:
- Malaysian or foreign citizen.
- No employment income in Malaysia in the 24 months before.
- Monthly salary of more than RM20,000.
- Meets the academic or work experience requirements, in a qualifying JS-SEZ sector and profession.
For a manufacturer moving senior managers or engineers into Johor, this can make hiring easier, even when the company itself does not qualify for the 5% corporate rate.
Forest City Special Financial Zone
Forest City (flagship I) has a separate package, announced in September 2024 before the JS-SEZ agreement. As summarised by Skrine, it includes a 0% rate for qualifying single family offices, a 5% rate for global business services, fintech and foreign payment system operators, and a 15% rate for knowledge workers. Forest City is also a duty-free island. Read more in our article on data centre land near Forest City.
What it means if you buy or rent a factory
The 5% rates are aimed at very large projects. Most of the special rates need a capital investment of RM500 million or more, not counting land. A company buying or renting a 20,000 to 100,000 sq ft factory will usually not qualify for them, but can still apply for Malaysia’s standard incentives through MIDA.
Smaller companies still feel the effect. Large investors in the JS-SEZ need suppliers, warehouses and service providers nearby, and data centre operators are buying land in Kulai, Sedenak, Iskandar Puteri and Kota Tinggi. Our Johor industrial land price guide lists recent land deals, and the Johor industrial outlook 2026 covers rents and prices.
When choosing a location, match the flagship area to your activity. An aerospace supplier would look at Senai and Skudai; a medical device or electronics maker at Kulai and Sedenak; a logistics company at Tanjung Pelepas; a chemical producer at Tanjung Langsat and Pasir Gudang. Our guide to Johor industrial parks compares the main parks in each area, and how to buy a factory in Johor explains the buying steps, including for foreign companies.
What happens next
- Master plan and investment blueprint: expected by the end of 2026. It should show the boundaries of each flagship area and more detail on the incentives.
- RTS Link: the rail link between Bukit Chagar in Johor Bahru and Woodlands North in Singapore is now expected to start passenger service in February 2027. See how the RTS Link affects industrial property.
- Application window: MIDA accepts JS-SEZ incentive applications until 31 December 2034.
For more background on the region, read our guide to Iskandar Malaysia, or see all factories and warehouses for sale and rent in Johor.
👉 Tell Jimmy your industry, the space you need and your budget, and he will shortlist factories and land in the right JS-SEZ area, usually within the day.
