Singapore businesses report overwhelming interest in Johor-Singapore SEZ

SINGAPORE (July 11): There has been overwhelming interest among Singapore businesses in the proposed Johor-Singapore Special Economic Zone (JS-SEZ), according to a report released on Thursday by a working group of the Singapore Business Federation (SBF).

Key findings of the JS-SEZ Singapore Business Working Group (SBWG) Bigger Together: Two Economies, One Ecosystem The report found that 93 percent of respondents considered Johor an attractive investment destination, with 50 percent already doing business in the state.

According to a statement from SBF, the report is based on findings from SBWG’s engagement with 160 Singapore companies across various industries between March and June 2024, which aimed to gather insights, feedback and suggestions to enhance JS-SEZ development.

The SBWG identified three key elements to the success of JS-SEZ: leveraging complementary economic strengths, firm commitment from the Singapore and Malaysian governments, and the importance of embracing experimentation and agility.

The report also highlighted significant challenges that need to be addressed to ensure the success of JS-SEZ, including Johor’s talent shortage, facilitating the movement of people and goods across the border, and the fragmented and complex investment promotion environment between Singapore and Johor.

In the area of ​​human resources, the group recommended combining Singapore’s management and research and development (R&D) capabilities with Johor’s execution and operational skills to support various industries, creating a unique workforce ecosystem that leverages the strengths of both countries’ economies.

Key proposals include developing uniform workforce regulations, investing in each other’s workforce to improve human resource capabilities and close the skills gap, and establishing talent acquisition programs.

“Around 60 per cent of the companies involved reported challenges sourcing technical and skilled labour in Johor, as well as problems attracting Singaporean talent to work across the border,” the statement said.

Companies also cited work visa issues (60%), skills gaps in Malaysia’s workforce (58%) and salary inconsistencies (21%) as reasons for the labour shortage.

To improve cross-border travel, the SBWG advocated for streamlining customs and border procedures, such as the introduction of a passport-free QR code system and digitized cargo clearance. The planned Johor Bahru-Singapore Rapid Transit System (RTS) link in 2026 is also seen as crucial in addressing these logistical challenges.

Other suggested improvements include developing enhanced border crossing points with automated crossing using biometric authentication and investing in efficient multi-modal connectivity. “Indeed, 36% of the companies involved would like to see improved connectivity in terms of special immigration lanes for people to enable smoother movement,” the report said.

To facilitate smoother movement of goods, the SBWG recommended implementing simplified customs and border clearance procedures, harmonizing tax and customs policies, developing integrated transport networks and logistics infrastructure, and improving digitalization and e-commerce enablement. Around 55 percent of businesses said they had difficulty dealing with tax issues, while 48 percent noted that faster cargo clearance is crucial to enabling an efficient flow of goods.

The current investment facilitation landscape between Singapore and Johor has been identified as fragmented and complex, with companies reporting obstacles in obtaining necessary permits and licences.

“58 percent of the participating companies want a joint investment facilitation facility to promote marketing of the zone and investor engagement, while 33 percent want a platform to facilitate mutual collaboration and networking opportunities for self-help and assistance,” the report said.

To overcome this, the SBWG recommends streamlining investment approvals, offering attractive tax incentives, developing robust legal and regulatory frameworks, providing comprehensive business facilitation services, and enhancing interoperability of financial systems.

Commenting on the report, SBWG chairman Teo Siong Seng said that during the survey period, businesses had been very positive in expressing interest in the success of JS-SEZ. “This is more than just a project – it has the potential to be a game changer for both Malaysia and Singapore. Bridging our economies will create new opportunities to benefit businesses on both sides of the Causeway,” he said.

Dr Azfar Mohamad Mustafar, Malaysia’s High Commissioner to Singapore, said the JS-SEZ would give both Singapore and Malaysia influence in the region, but industry feedback would be critical to its success.

“When we have done this in the past, we have tried to do it on each other’s behalf. For example, when we did Iskandar Malaysia, we tried to bring Singaporean investors into Malaysia, but I think this model no longer works in the future we face. We need to look at Singapore and Malaysia, particularly Johor, as one whole, so that investors looking at the region can see Malaysia and Singapore as investment destinations,” he added.

Read also:
Finance Minister Rafizi says government will co-finance infrastructure in Johor-Singapore SEZ with private sector
Malaysia-Singapore Business Council discusses exploring SEZ opportunities

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