Singapore and Malaysia exchanged an Agreement on the Johor-Singapore Special Economic Zone (JS-SEZ) on 7 January 2025 at the 11th Malaysia-Singapore Leaders’ Retreat. The Agreement was signed by Deputy Prime Minister and Minister for Trade and Industry, Gan Kim Yong, and Malaysia Minister of Economy, Rafizi Ramli. The exchange was witnessed by Malaysia Prime Minister, YAB Dato’ Seri Anwar Ibrahim and Prime Minister, Lawrence Wong.
The JS-SEZ Agreement aims to strengthen the value proposition of Johor and Singapore to compete for global investments together by (a) improving cross-border goods connectivity between Singapore and Johor; (b) enabling freer movement of people; and (c) strengthening the business ecosystem within the region. Singapore- based companies can benefit from this enhanced connectivity for goods and people by expanding their business overseas and twinning business operations, tapping on the complementary strengths that Singapore and Johor offer.
Key Elements of the Agreement
The Joint Statement by MTI and Malaysia Ministry of Economy (attached as Annex A) outlines details of the JS-SEZ Agreement, including (a) JS-SEZ Area; (b) key areas of cooperation and (c) specific initiatives.
Early Initiatives
Singapore and Malaysia have launched several early initiatives based on business feedback to build towards the JS-SEZ. These include:
a) Passport free QR code clearance at Singapore’s land checkpoints with Malaysia. Since its implementation in March 2024, congestion has reduced and the flow of traffic on the Causeway has eased;
b) Invest Malaysia Facilitation Centre- Johor (IMFC-J). Malaysia will establish the IMFC-J, a one-stop shop which will streamline and expedite the process for companies looking to establish in or expand to the JS-SEZ;
c) Partnerships to strengthen cooperation in technical and vocational education and training (TVET) initiatives to meet industry demands. Examples of such TVET partnerships include MOUs between Singapore Polytechnic and the Federation of Malaysian Manufacturers (FMM), and Singapore’s ITE Education Services (ITEES) and the Johor Skills Development Centre (JSDC), as well as the signing of a Cooperation Note on Talent Development between Republic Polytechnic and the Johor Talent Development Council (JTDC); and
d) Streamlined customs procedures for land intermodal transhipments. From 1 January 2025, traders only need to apply for a single transshipment permit with Singapore Customs for land intermodal transshipments, instead of two separate permits required previously. This new procedure helps businesses save costs and improve efficiency.
Bilateral Economic Cooperation
Singapore and Malaysia share strong economic ties. In 2023, Malaysia was Singapore’s third largest trading partner, with total bilateral trade amounting to S$123.6 billion1. In the same year, Singapore was Malaysia’s second largest trading partner. In 2023, Singapore was Malaysia’s largest source of foreign direct investment (FDI), contributing RM 43.7 billion or 23.2% of Malaysia’s total FDI2.
Within Malaysia, Johor has become a key investment destination for Singapore companies due to stronger economic partnerships and improved connectivity. In 2023, Johor recorded RM31 billion in FDI, with Singapore and the United States as the main investors in the manufacturing sector3.
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1 Source: Singapore Department of Statistics (DOS), February 2024.
2 Source: Malaysian Investment Development Authority (MIDA), February 2024.
3 Source: Malaysian Investment Development Authority (MIDA), May 2024.
