The deep-rooted ties between Johor and Singapore have reached a game-changing milestone – the Johor-Singapore Special Economic Zone (JS-SEZ).

Speaking at the 2024 ASEAN Conference, Johor Chief Minister Dato' Onn Hafiz bin Ghazi offered a deep dive into the JS-SEZ’s objectives, addressing key questions and opportunities for investors.

The JS-SEZ launch has been highly anticipated. Ng Wei Wei, Managing Director and CEO of UOB Malaysia, shared a Singapore Business Federation survey where 93 per cent of 160 businesses see Johor as a top investment location, with 50 per cent already operating there.

(Left to right): Mr Wee Ee Cheong, Deputy Chairman and Chief Executive Officer (CEO), UOB; Ms Ng Wei Wei, CEO, UOB Malaysia; Dato' Onn Hafiz bin Ghazi, Johor's Menteri Besar; and Mr Natazha bin Hariss, Invest Johor's CEO, at the Memorandum of Understanding exchange ceremony on 29 August 2024.

While concerns from past projects persist, the JS-SEZ aims to address these challenges by fostering stronger cross-border collaboration and building a resilient economic bridge across the Causeway.

Shenzhen wasn’t built in a day

Reflecting on Shenzhen’s transformation from a fishing village into a global economic powerhouse, Dato’ Onn Hafiz framed JS-SEZ as a long-term vision rather than an overnight project.

He pointed to the Iskandar Malaysia project, which, over 17 years, has attracted RM400 billion in investments and created over a million jobs—laying the foundation for JS-SEZ’s ambitious growth.

He also said the success of JS-SEZ depends on cooperation and strong backing from the Malaysian federal and Singaporean governments, together with their commitment to cut down red tape and break down silos. His approach to the JS-SEZ lies in taking bold steps to achieve extraordinary results.

Quoting a Mandarin proverb, he reflected: “If you want to see a thousand miles, you must climb another storey.”

Johor has set ambitious goals, with the JS-SEZ at the core of its economic ambition.

The JS-SEZ is viewed as a strategic move to supercharge Johor’s economy, attract world-class investments, and deepen its ties with Singapore.

As part of the Maju Johor Developed State goal, the state government is pushing for a bold seven per cent annual economic growth, aiming to transform the state into a high-income powerhouse by 2030.

While Penang and Selangor have long been established as Malaysia’s key markets, Johor is now emerging as the next frontier for growth. With its strategic location and close ties to Singapore, the JS-SEZ is set to become a powerful economic engine, unlocking new opportunities across industries.

The initiative will focus on strategic sectors, including advanced manufacturing, the digital economy, financial services, education, tourism, logistics, food security, and healthcare.

Figure 1: The JS-SEZ will focus on high functioning sectors

The JS-SEZ is focused on four key pillars that will address issues that have affected Johor’s investor perception: skilled talent development, cross-border mobility, investment facilitation, and security.

• Talent development
  A dedicated Johor Talent Development Council, led by Malaysia's Deputy Prime Minister and supported by the Ministry of Higher Education, aims to cultivate a robust workforce tailored to JS-SEZ needs.
• Ease of doing business
  The Invest Malaysia Facilitation Centre (IMFC) in Johor, only the second of its kind after Kuala Lumpur, serves as a one-stop centre for business licensing, land management, and investor support, managed by Invest Johor and the Ministry of Trade.
• Improved mobility
  Measures to ease cross-border travel include increasing Customs, Immigration, and Quarantine (CIQ) staffing from 70 per cent to 98 per cent, additional counters, and improved bus services. This will help reduce wait times at the Causeway. Bonded zones are also being developed to streamline goods movement within the JS-SEZ.
• Enhanced security
  Security measures have been prioritised, with a 46 per cent drop in crime since 2019 due to increased CCTV coverage and collaboration between local councils and police.

Figure 2: The JS-SEZ will address four key pillars to create a pro-business ecosystem

Early movers gain the edge

For investors, timing is everything. Early investors in the JS-SEZ are already reaping benefits, with data centres and manufacturing facilities securing approvals at record speed – some establishing operations within just nine months.

As companies adopt a “China Plus One” strategy to enhance resilience, ASEAN has emerged as the preferred “plus one”. However, navigating the region’s varied regulatory and operational landscape demands strategic partnerships.

UOB exemplifies such support through its FDI Advisory unit, which connects businesses to government agencies, talent networks, and local supply chains. Since 2011, the unit has supported 5,000 companies in their cross-border expansion efforts. The companies that we have supported since 2020 have created more than 250,000 job opportunities across ASEAN and Greater China.

At the ASEAN conference 2024, UOB, the Singapore Business Federation (SBF), Rajah & Tann, and RSM Singapore, signed a Memorandum of Understanding (MOU) to support Singapore businesses expanding into ASEAN region.

The MOU covers three key areas:

• Leveraging the ASEAN Conference as a platform to connect businesses with regional opportunities.
• Organising market exploration trips to help companies navigate new markets.
• Providing expert insights and advisory services to support regional expansion.

UOB has also signed MOUs with Lingang Group, a state-owned industrial park developer, and Invest Johor, Johor’s investment promotion agency, to enhance cross-border trade and investment.

As ASEAN’s business landscape evolves, UOB remains committed to helping companies grow through strategic partnerships and financial expertise.

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