27/09/24

Malaysia to launch special financial zone in Forest City

As reported today on financialexpress.com Malaysia’s government is creating a special financial zone in Forest City to boost investment, growth and economic activities. The Forest City has the potential to mature into a globally recognized financial hub, the likes of Shenzhen in China and Dubai International Financial Centre in the UAE, according to the Malaysian government.

The government of Malaysia has announced a competitive package of incentives to make Forest City a magnet for international capital. This includes a concessionary corporate tax rate between 0% and five percent.

A special individual income tax rate of 15 percent for knowledge workers, and Malaysians, who choose to work here, has also been announced.

The government of Malaysia is providing these incentives to attract businesses, financial institutions, and high-net-worth individuals, further augmenting Forest City’s position as a preferred investment destination.

Malaysia’s Forest City will be the first location in Malaysia to offer a 0% tax rate for Family Offices. The Single-Family Office Scheme, coordinated by the Securities Commission Malaysia, aims to attract regional and Malaysian families to manage their family wealth from Malaysia. This scheme is aimed at being operational by the first quarter of 2025.

There are an estimated 8,030 single-family offices globally today. This number is projected to grow by 75% to more than 10,720 by 2030. Total estimated assets under management of Family Offices are expected to rise to 5.4 trillion US Dollars by 2030, from 3.1 trillion US Dollars currently.

Forest City Special Financial Zone with a basket of attractive incentives has been designed to catalyse the birth of a new financial and economic hub in the region. Malaysia’s Forest City with its combination of a duty-free island within a special financial zone, presents a unique proposition as a catalyst for economic development in the southern region of Malaysia, anchored on innovative financial services.

Forest City aims to create an environment conducive to the growth of fintech, focusing on areas such as regulatory technology (RegTech) and insurtech. By fostering collaboration, innovation, and investment, the zone supports the broader national objective of transforming Malaysia into a hub for cutting-edge financial services.

Banking institutions, insurance, capital market intermediaries and other eligible financial sector entities will also enjoy incentives that include special deductions on relocation costs, enhanced industrial building allowances and withholding tax exemptions.