Every day, more than 300,000 Malaysians travel across the border from Johor Bahru (JB) into Singapore1, whilst an estimated one in three Singaporeans travel to JB at least once a month for leisure2. Singapore and JB have long enjoyed close ties, and share one of the busiest overland border crossings in the region.

 

Now, with the establishment of the Johor-Singapore Special Economic Zone Agreement (JS-SEZ), economic activity between JB and Singapore looks set to grow even more. In this blog post, we'll delve into what the JS-SEZ Agreement means for your business and explore the potential benefits and opportunities of this bilateral initiative. 

What is the Johor-Singapore Special Economic Zone?

The JS-SEZ is a special economic zone jointly developed by Singapore and Malaysia on 7 January 2025. Its primary aims are to strengthen economic ties, enhance connectivity, and streamline business operations between Johor and Singapore.

 

Some of the early initiatives implemented with the JS-SEZ3 include:

 

  • Passport-free QR Code Clearance: Implemented in March 2024 at Singapore’s land checkpoints to reduce congestion on the Causeway.
  • Invest Malaysia Facilitation Centre - Johor (IMFC-J): Malaysia is establishing this one-stop centre to streamline and expedite processes for companies looking to set up investments or expand within the JS-SEZ.
  • Partnerships in Technical and Vocational Education and Training (TVET): Examples of such collaborations include: MOUs between Singapore Polytechnic and the Federation of Malaysian Manufacturers (FMM).
  • Streamlined customs procedures for land intermodal transhipments. From January 1, 2025, traders will only need a single transhipment permit from Singapore Customs for land intermodal transhipments, replacing the two previously required permits.

 

Besides these initiatives, there are also a series of tax incentives and financing support in the works for businesses looking to set up in the JS-SEZ and the Johor Bahru-Singapore Rapid Transit System Link (RTS Link) which is expected to start passenger service by the end of 20264.

 

Key Areas and Sectors in the JS-SEZ

 

The JS-SEZ is split into nine key areas with specific business sectors for each zone5.

Area Expected Key Sectors

Sedenak

Manufacturing, Business Services, Digital Economy, Education, Energy, Food Security, Health, Logistics, Tourism

Senai-Skudai

Manufacturing, Digital Economy, Education, Logistics, Tourism

JB City Centre Business Services, Digital Economy, Health
Desaru Education, Food Security, Health, Tourism
Iskandar Puteri Manufacturing, Business Services, Digital Economy, Education, Health, Tourism
Pasir Gudang Manufacturing, Energy, Logistics
Tanjung Pelepas - Tanjung Bin Manufacturing, Energy, Logistics
Forest City Financial Services
Pengerang Integrated Petroleum Complex Manufacturing, Energy, Logistics

 

Opportunities for Singaporean Businesses in the JS-SEZ

The Johor-Singapore Special Economic Zone (JS-SEZ) is an excellent opportunity for businesses in Singapore looking to expand across the border. Local SMEs can look forward to the following benefits.

 

  • Reach the Malaysian Market: The JS-SEZ provides Singaporean SMEs with direct and streamlined access to Johor's growing consumer market, opening up new revenue streams and opportunities for brand expansion within Malaysia.
  • Optimise the Cost of Doing Business: SMEs can significantly reduce operational overheads by leveraging more competitive land prices and a larger, cost-effective labour pool in Johor, boosting profitability and competitiveness.
  • Increased Land Area for Operations: The special economic zone offers Singaporean businesses access to significantly more land for setting up or expanding manufacturing facilities, warehouses, or large-scale operations that may be constrained by space in Singapore.
  • Diversify Supply Chains and Manufacturing Bases: SMEs can enhance their business resilience by establishing alternative supply chain nodes and manufacturing facilities in Johor, mitigating risks associated with over-reliance on a single location.
  • Collaborate with New Business Partners: The integrated nature of the JS-SEZ fosters an environment conducive to forming new partnerships, joint ventures, and collaborations with Malaysian businesses, expanding your network and market reach.

How CIMB Can Help Singapore Businesses Looking to Capitalise on the JS-SEZ

Looking to expand into Malaysia with the JS-SEZ? CIMB’s strong presence in Singapore and Malaysia and our cross-border capabilities make us the ideal banking partner for your regional ambitions.

 

  • Green Lane Account Opening: CIMB offers streamlined processes for opening a business bank account in both Singapore and Malaysia.
  • Guaranteed Best SGD to MYR Rates: Enjoy guaranteed best exchange rates for B2B foreign currency transfers between Singapore and Malaysia.
  • HalalBizReady: For businesses looking to tap into the Halal economy, CIMB's HalalBizReady programme provides comprehensive support and insights that will help your business stay compliant.
  • Efficient Cross-Border Remittance: Facilitate swift and secure zero-free telegraphic transfers between your Singapore and Malaysian entities, optimising your cash flow and operational efficiency.
  • ASEAN Financial Passport: Leverage our strong ASEAN presence through this one-stop solution, providing a seamless cross-border banking experience with consistent support across our regional network.
  • Dedicated Banking and Support: Our dedicated teams in both Singapore and Malaysia offer expert banking and advisory support, tailored to your unique cross-border business needs.

 

Don't miss out on the opportunities presented by the JS-SEZ. Partner with a bank that truly understands the landscape and can help you bridge the gap between Singapore and Johor.

 

Speak with us today to find out how CIMB can help take your business across borders.

References:

 

  1. Channel NewsAsia
  2. Singapore Business Review
  3. Singapore Economic Development Board (EDB)
  4. Channel NewsAsia
  5. Channel NewsAsia

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