Malaysia and Singapore formally established the Johor-Singapore Special Economic Zone (JS-SEZ) on January 7, 2025, at the 11th Malaysia-Singapore Leaders’ Retreat. The tax incentive package published by the Malaysian Investment Development Authority (MIDA) explicitly lists manufacturing in AI and quantum computing supply chains among the qualifying activities for preferential corporate tax rates.
Companies making new investments in quantum computing supply chain manufacturing with capital above RM1 billion (approximately USD 220 million) can access a corporate tax rate of 5% for up to 15 years, compared to the standard 24% rate. Investments between RM500 million and RM1 billion qualify for the 5% rate for 10 years. Existing companies undertaking qualifying new investments are eligible for a 100% Investment Tax Allowance on capital expenditure incurred within five years. Knowledge workers in the zone can receive a flat 15% personal income tax rate for 10 years.
Applications for the incentives are open from January 1, 2025, through December 31, 2034. The JS-SEZ spans approximately 3,500 square kilometers across nine flagship zones in southern Johor.