Launch of Forest City Special Financial Zone: Key to Malaysia's Economic Growth

The Ministry of Finance has announced the establishment of the Forest City Special Financial Zone (FCSFZ), a strategic move to position Malaysia as a global financial hub, with a special focus on Johor. This initiative, aligned with the MADANI Economic Framework, is designed to foster economic growth through competitive tax incentives and the promotion of cutting-edge financial services.

KEY POINTS:

1. Competitive Tax Incentives
  • Corporate tax rates between 0-5% for businesses operating in the zone.
  • A special 15% individual income tax rate for knowledge workers, and Malaysians, who choose to work in the zone.
  • 0% tax rate for Family Offices, encouraging global and regional family wealth management operations to be based in Malaysia.
2. Family Office & Wealth Management:
  • The global market for Single-Family Offices is expected to grow significantly, with assets under management projected to reach USD 5.4 trillion by 2030. The FCSFZ aims to attract a portion of this growing market, positioning Malaysia as a key player in family wealth management.
  • Supported by strong infrastructure, governance, and a skilled workforce, the zone is integral to Malaysia’s vision of becoming a wealth management hub.
3. Fintech & Global Business Services:
  • Special focus on financial technology (fintech), regulatory technology (RegTech), and shared services.
  • A 5% tax rate for fintech and global business service companies, fostering innovation and collaboration.
4. Regional Payment Hub:
  • The FCSFZ will help Malaysia become a regional payment hub, capitalizing on ASEAN’s rapid growth in e-payment adoption, which saw 11.5 billion transactions in 2023.
5. Banking & Financial Sector Support:
  • Financial institutions, including banks, insurance companies, and capital market intermediaries, will benefit from:
    • Special deductions on relocation costs.
    • Enhanced industrial building allowances.
    • Withholding tax exemptions.
  • These incentives are designed to boost Malaysia’s competitiveness as a financial hub and support seamless cross-border transactions.
6. Talent Development
  • A strong focus on creating high-value jobs for Malaysians and attracting top global talent to support the long-term growth of Forest City and Malaysia’s financial sector.
CONCLUSION

The Forest City Special Financial Zone represents a bold vision to establish Malaysia as a leading financial hub in Asia. With attractive tax incentives, comprehensive support for financial institutions, and a strong focus on fintech and Family Offices, the FCSFZ is set to drive economic growth and secure Malaysia’s position on the global financial stage.
 
 
For more information please contact the following personnel:

Ten Jia Sheng
+60 14-911 1880
jsten@jsc-corp.com

22 Sep 2024