National Strategic Designation
Malaysia's Prime Minister officially designated Forest City a Special Financial Zone (SFZ), a key pillar of the MADANI economic framework.
Incentives · Special Financial Zone
Forest City
Special Financial Zone
A national strategic financial zone under the MADANI economic framework, providing a base for cross-border capital.
Strategic Position & Milestones
National Support, Greater Confidence
Incentive Legislation Taking Effect
The gazetting of dedicated SFZ tax incentive legislation is largely complete, giving global investors an increasingly clear legal framework.
Capital Gathering Momentum
Malaysia's first special zone for family offices has granted in-principle approval to nine single family offices (SFOs), with indicative assets under management approaching RM700 million.
Core Tax Incentives
Tax Rates That Change the Equation
0% · Up to 20 Years
Eligible single family office vehicles (SFOVs) receive 0% corporate tax for up to 20 years (10 + 10). Initial AUM starts at RM30 million (approximately US$6.5 million), well below Singapore's approximately S$20 million (RM70 million). Fixed assets may account for up to 90% of AUM. Asset transfers qualify for exemptions from 2%–4% stamp duty and capital gains tax.
5% · Up to 20 Years
Targeting fintech, including RegTech and InsurTech, financial global business services (FGBS) and foreign payment system operators (FPSO). Eligible businesses established on Island I and using specified technologies receive a 5% corporate tax rate for 10 years, extendable by a further 10 years subject to compliance.
15% · 10 Consecutive Years
Eligible knowledge workers and professionals receive a 15% personal income tax rate for 10 consecutive years, compared with the federal maximum of 30%.
SFO Entry & Compliance Requirements
Clear, Phased Requirements
Pre-registration must be submitted to the Securities Commission Malaysia (SC). A dedicated SFO management company (SFO MC) is legally exempt from the fund management licence requirement under the Capital Markets and Services Act 2007 (CMSA).
| Requirement | First 10 Years | Additional 10 Years |
|---|---|---|
| Assets Under Management (AUM) | At least RM30 million | Raised to at least RM50 million |
| Local Investment | 10% of AUM or RM10 million, whichever is lower | 10% of AUM or RM10 million, whichever is higher |
| Team | At least two full-time staff, including an investment professional earning at least RM10,000/month | At least four full-time staff |
| Operating Expenditure | At least RM500,000/year | At least RM650,000/year |
Investment Support & Financial Access
Foreign Exchange & Banking
With Bank Negara Malaysia (BNM) support, locally incorporated foreign banks may establish additional branches in the zone. Flexible foreign exchange arrangements support offshore foreign-currency borrowing and global asset allocation.
Operating Tax Deductions
A special relocation tax deduction of up to RM500,000; an annual 10% industrial building allowance; and a 100% withholding tax exemption on specified service income for up to 10 years.
Property & Residence
Purchases of completed residential or commercial property qualify for up to 50% stamp duty relief on transfer and financing agreements. IMFC-J, the Invest Malaysia Facilitation Centre Johor, works with national agencies to provide a one-stop setup channel.