Johor Bahru, Malaysia, and Singapore share a relationship akin to that of Shenzhen and Hong Kong—closely intertwined, economically interactive, and geographically separated by a mere waterway. Together, they form a crucial link in regional development.
Shenzhen, a frontier city of China’s reform and opening-up policy, neighbours Hong Kong and has benefited from its economic boom and wave of technological innovation. It has undergone a magnificent transformation, becoming a shining gem on China’s map and an important port city. Its rise to prominence is nothing short of a global miracle.
Similarly, Singapore and Malaysia have joined forces to create a special economic zone, drawing on Shenzhen’s development model. They aim to replicate Shenzhen’s success by attracting foreign investment, promoting industrial upgrading, fostering innovation and entrepreneurship, and improving the business environment. The goal is to invigorate economic vitality, enhance regional competitiveness, and achieve more sustainable and inclusive growth, paving the way for a “Shenzhen 2.0.”
At the beginning of this year, Singapore and Malaysia jointly unveiled a grand blueprint for economic cooperation by signing a Memorandum of Understanding (MOU) on the Johor-Singapore Special Economic Zone (JS-SEZ), marking the start of a new chapter in the economic integration between the two nations.
In July this year, under the glittering lights of Singapore’s SBF Centre, the Malaysia-Singapore Business Council (MSBC) convened a joint meeting. During this meeting, both parties not only reaffirmed their strong commitment to deepening cooperation but also identified the Johor-Singapore Special Economic Zone as a powerful engine for shared prosperity. Their goal is to explore uncharted economic territories, navigate global challenges, and seize new opportunities together.
As the project progresses, the latest news is exciting—the agreement, which holds the hopes of both nations’ people, is expected to be officially finalized in September. High-level officials from both Singapore and Malaysia will iron out all the cooperation details at the upcoming bilateral leadership summit, ensuring the smooth launch of the economic zone, which will add a vibrant new layer to the global economic landscape.
Malaysian Minister of Economy Rafizi Ramli stated that the specific measures for the Johor-Singapore Economic Zone will be jointly developed by the Ministry of Finance, Ministry of Investment, Trade, and Industry, and the Johor state government. These measures are expected to be included in the 2025 Budget to be announced in October.
The Johor-Singapore Economic Zone is anticipated to attract more global investors. It offers the best of both worlds, allowing investors to enjoy Singapore’s advanced technology and Johor’s resource advantages.
Iskandar Malaysia: This 2,217 square kilometer economic corridor, established in 2006, encompasses major infrastructure and real estate projects in Johor, including Johor Bahru City Center and Forest City.
Pengerang: Known for the Pengerang Integrated Petroleum Complex, this area houses a large petrochemical facility, including the Pengerang Energy Complex currently being developed by Singapore’s ChemOne Holdings.
Spanning 3,505 square kilometers, the Johor-Singapore Economic Zone is nearly twice the size of Shenzhen and will cover 16 economic sectors, including electronics, healthcare, pharmaceuticals, aerospace, specialized chemicals, logistics, education, financial services, the digital economy, tourism, food and agriculture technology, creative industries, halal industries, and manufacturing.
The Singapore and Malaysian governments have set key objectives for the economic zone, including improving the overall business ecosystem and resource flow to benefit both nations.
Strengthening the business ecosystem: This will be achieved through enhanced cross-border business mobility along the Johor Causeway, creating a vibrant multinational business ecosystem.
Economic benefits for both countries: Singapore and Malaysia are among each other’s largest trading partners, with bilateral trade reaching an impressive $83.53 billion annually. Singapore is also one of Malaysia’s largest sources of foreign direct investment (FDI), contributing 8.3% of the total FDI.
While cooperation is still in its early stages, the joint statement released after the signing of the MOU outlined several incentives for businesses wishing to operate in the region.
One-Stop Business Investment Centre: This centre will facilitate the application process for various necessary licenses and approvals, including special tax arrangements and processes for foreign investors.
Passport-Free Travel: Watch for the implementation of a passport-free QR code clearance system at the border. This will simplify business travel between Singapore and Malaysia.
Digitized Customs Clearance: Digitized customs clearance at land checkpoints will expedite the flow of goods between the two regions.
Investor Forums: Malaysia and Singapore will jointly host investor forums to gather feedback from businesses operating in the region.
Renewable Energy Cooperation: If you are involved in renewable energy, the economic zone will promote cross-border cooperation, including discussions on green and digital economy frameworks, with initiatives such as cross-border electricity trading.
Training Programs: Governments will also organize work-based learning and training programs to address the talent and skills gaps in relevant industries within the region.
Joint Promotional Activities: Watch for more business exchange opportunities as Malaysia and Singapore plan to carry out joint promotional activities to boost investment and trade between Johor and Singapore.
This isn’t the first time Singapore and Malaysia have teamed up to create a special economic zone.
Remember the buzz around Forest City next to Singapore? Initially hailed as Malaysia’s version of Shenzhen, this ambitious project promised to create a vibrant eco-metropolis right next to Singapore. Though the project faced setbacks in 2018 due to political changes in Malaysia, its concept—bringing together Malaysia’s resources and Singapore’s connectivity—remains a powerful idea.
Meanwhile, the Johor-Singapore Causeway remains the most important land transportation link between the two countries, with the distance from Singapore to Johor Bahru being just about one kilometre.
According to Singapore’s Civil Service report, the causeway has continued to expand, with more than 60,000 vehicle crossings daily and 100 million people crossing each year. During peak hours, about 350,000 people cross daily.
To address the chronic congestion at the Johor-Singapore Causeway, former Singaporean Prime Minister Lee Hsien Loong and former Malaysian Prime Minister Najib Razak agreed in 2010 to the Johor-Singapore Rapid Transit System (RTS) plan.
The RTS is set to provide convenience and opportunities for people from both nations, seamlessly connecting Singapore and Johor for a dual-city lifestyle.
The world’s first cross-border metro system is scheduled to begin operations in late 2026.
The RTS will start at Bukit Chagar Station in Johor Bahru, pass through downtown Johor Bahru, and connect directly to Woodlands North Station in Singapore, taking only six minutes to cross the border. From there, commuters can easily access various parts of Singapore via the Thomson-East Coast MRT line.
This connection will be even more convenient than traveling from Shenzhen to Hong Kong, which requires a travel permit.
But why is Singapore partnering with Malaysia?
As Singapore’s economy continues to show dynamic growth, attracting global capital and talent, industries and capital have increasingly concentrated in this land of opportunity, creating a powerful economic engine. However, this prosperity has also brought rising living costs, making life in Singapore more challenging for some.
Seeking more affordable living conditions while maintaining close ties to Singapore’s economic centre, many have turned their attention to Johor Bahru and surrounding areas in Malaysia. The Johor-Singapore Special Economic Zone (JS-SEZ) is emerging as an attractive alternative for Singaporeans to purchase property, offering lower living costs while staying connected to regional economic flows.
This trend reflects people’s pursuit of a higher quality of life and heralds new opportunities and possibilities brought by regional economic integration.
What do you think of this new economic zone? Would you consider buying property in Johor Bahru? Is now the right time to invest?
Feel free to share your thoughts and engage with us in the comments section!
