Pulau 1 Set to Become Malaysia's New Duty-Free Island

In a move set to significantly enhance Malaysia’s economic landscape, Pulau 1 will join the ranks of Malaysia’s renowned duty-free islands such as Labuan, Langkawi, Tioman, and Pangkor. This strategic move aligns with Prime Minister Anwar Ibrahim's vision to designate Forest City as a special financial zone, further enhancing Malaysia’s economic landscape.

The Dewan Rakyat has recently passed the Customs (Amendment) Bill 2024, setting the stage for Pulau 1 in Johor’s Forest City to become a duty-free island. This landmark decision aims to boost economic development in the area, with significant implications for local and international stakeholders.

Deputy Finance Minister Lim Hui Ying, who presented the bill, highlighted that Pulau 1, a levee island recognized by the Department of Survey and Mapping, Malaysia, will benefit from special tax provisions under Act 235. The island, connected by a 600-metre-long bridge, meets the official criteria of an island.

To ensure transparency and effective law enforcement, visitors departing Pulau 1, Forest City for mainland Malaysia must provide proof of stay for no less than 40 hours to the Royal Malaysia Customs Department. This measure is designed to ensure proper monitoring and regulation of the duty-free benefits.

Minister Lim emphasized the expected economic impact of Pulau 1's new status, predicting a surge in job opportunities within the hospitality, finance, and retail sectors. This development is set to transform the local economy, attracting both businesses and tourists.

In addition to the Customs Bill (Amendment) 2024, Parliament has also passed several related bills, including the Tax Bill (Amendment) 2024, the Free Zones Bill (Amendment) 2024, the Sales Tax Bill (Amendment) 2024, and the Service Tax Bill (Amendment) 2024. During the final debate on the Tax Bill (Amendment) 2024, Lim explained that certain goods such as alcohol, chocolate, cosmetics, and perfumes will be exempt from taxes in Pulau 1, enhancing its appeal to tourists and investors. These legislative efforts collectively aim to create a comprehensive framework for Pulau 1's duty-free status.

In line with these developments, the Malaysian government is finalizing a deal with Singapore to develop a cross-border economic zone in Forest City, Johor Bahru. This initiative is expected to include a major property project aimed at enhancing trade and connectivity between Malaysia's southern Johor state and the island nation.

Source: Business Today

Relevant Article:

• Johor Bahru Condominium & Project Development in 2024
• Unlocking Growth Potential: Forest City's Journey as a Special Financial Zone