Remember Forest City in Johor? For the past few years, many citizens questioned what the government should do to the abandoned mega project, which has been dubbed the Johor “ghost city”. Previously, there were rumours that the developer was building a casino in the area to save the place – but the government quickly shut down those claims.
Instead, Prime Minister Datuk Seri Anwar Ibrahim is looking at another method to revive Forest City. Last week, the government launched the Forest City Financial Zone (SFZ), along with several incentive packages to boose the real estate sector within the region. These incentives aim to attract international capital, create jobs and even improve the economy in neighbouring areas – amongst other things.
One of the incentives is the reduced tax measures, including a 0% tax rate for family offices or private asset management firms for wealthy individuals and their families. This initiative will be the first of its kind in Malaysia and will be operational by the first quarter of 2025. Finance Minister II Amir Hamzah Azizan said the reduced tax rate aims to attract regional and local families to manage their family wealth from Forest City.
Amir also presented a special 5% tax rate incentive in hopes of transforming Forest City into a hub for financial business services, financial technology and foreign payment system operators. According to the minister, eligible financial sector entities can also enjoy special deductions on relation costs, enhanced industrial building allowances and withholding tax exemptions if they choose to operate out of the region.
The government will impose a special individual income tax rate of 15% for Malaysians and knowledge-based workers who choose to work in the SFZ. Of course, these incentives come with conditions, but analysts have reacted positively to these plans. However, there are still calls to improve the infrastructure in Forest City before implementing any of these measures.
Only time will tell if these plans can help save Forest City – but what are your thoughts? Do you think these incentives will have a positive impact?
Sources: The Edge, The Star, Strait Times, Free Malaysia Today
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