0% Tax, Forest City Special Financial Zone (FCSFZ) to Attract Global Investments

- Foto BERNAMA

Forest City is set to become Malaysia’s first location to implement a zero-tax policy on family wealth offices, introduced as part of a broader set of incentives to attract international capital.

According to Finance Minister II, Datuk Seri Amir Hamzah Azizan, this zero-tax incentive is designed to position Forest City as a leading destination for international investors.

Additional incentives include a reduced corporate tax rate ranging from zero to five percent, as well as a special 15 percent personal income tax rate for knowledge workers, including Malaysians who choose to work in Forest City.

“These incentives are expected to attract businesses, financial institutions, and high-net-worth individuals, strengthening Forest City's reputation as a prime investment hub,” said Amir Hamzah during the launch of the Forest City Special Financial Zone (SFZ) incentive package.

The launch event was graced by Johor Regent Tunku Ismail Sultan Ibrahim, with Johor Menteri Besar Datuk Onn Hafiz Ghazi also in present.

The family wealth office scheme, coordinated by the Securities Commission Malaysia, aims to appeal to regional and local families by offering an attractive platform to manage their wealth. Currently, there are around 8,030 single-family offices worldwide, with projections indicating a rise to over 10,720 by 2030. The total assets under management are also expected to grow significantly, from US$3.1 trillion to an estimated US$5.4 trillion (RM22.6 trillion) by the same year.

The establishment of family offices is anticipated to broaden the investment landscape, directing private capital towards sectors with high growth potential. This effort aligns with the ministry’s GEAR-uP program, which aims to harness the strength of government-linked investment companies (GLICs) to stimulate economic development through domestic investments, including venture capital and private equity.

In addition to family wealth office incentives, Malaysia’s financial institutions, insurance firms, and capital market intermediaries will benefit from special deductions on relocation expenses, enhanced industrial building allowances, and exemptions from withholding tax. Local foreign banks will benefit from increased regulatory flexibility, allowing them to open more branches within the SFZ, and will also have access to foreign exchange advantages for offshore borrowing and currency asset investments.

Amir Hamzah emphasized Forest City SFZ’s potential to not only stimulate growth in Johor but also expand into the broader ASEAN region. With aspirations to become a globally recognized financial hub similar to Shenzhen in China or Dubai International Financial Centre, Forest City SFZ is primed for robust participation from both local and international stakeholders.

Prime Minister Datuk Seri Anwar Ibrahim had previously announced the formation of the SFZ in August 2023, with incentives that include tax breaks and simplified visa access for professionals commuting between Singapore and Johor.

 

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