Malaysia is offering zero percent tax rates for family offices in Malaysia’s controversial Forest City megaproject, a government official has said.
Malaysia’s Second Finance Minister Amir Hamzah Azizan said the move “aims to attract regional and Malaysian families to manage their family wealth from Malaysia,” as reported by Bloomberg.
Azizan added that the program will be the first of its kind in the Southeast Asian country, and that it is planned to be operational by the first quarter of 2025.
Bloomberg also reported that the Malaysian government is offering a concessionary corporate tax rate of between zero and 5 percent, as well as an individual income tax rate of 15 percent for knowledge workers and Malaysians working in Forest City.
Newsweek has contacted the Malaysian finance ministry for comment via email outside of standard working hours.
A general view shows condominiums at Forest City, a development project launched under China’s Belt and Road Initiative, in Gelang Patah in Malaysia’s Johor state on September 1, 2023. Family offices who set up in Malaysia’s Forest City megaproject will be able to benefit from zero percent tax rates, a government official has said.
Mohd Rasfan/AFP via Getty Images
What is Forest City?
Forest City is a large-scale development project located in Johor, near the southern tip of the country, close to Singapore. Launched in 2016 by Chinese property giant Country Garden under China’s Belt and Road Initiative, the $100 billion megaproject aimed to create an eco-friendly urban center spread across four man-made islands, with ambitious plans to house 700,000 residents.
However, as of 2023, only a fraction of the development had been completed, and less than 1 percent of its projected population lived there—around 9,000 people.
The project was originally aimed at Chinese buyers seeking holiday homes or investment properties. However, policy changes in China, such as the 2017 introduction of strict capital controls limiting the amount of money individuals could move abroad, heavily impacted sales. In addition, Malaysia’s former prime minister, Mahathir Mohamad, expressed strong opposition to the project, arguing that it catered primarily to foreigners rather than Malaysians. In 2018, he restricted visas for Chinese buyers.
Malaysian Megaprojects
Separately, plans are in the works for a 582-acre mixed-use development Malaysian smart city—Discovery City—set to be a new precinct within Ibrahim Technopolis, a planned 7,290 acre township in Johor.
The designer behind the project said the city’s design will focus on integration with the region’s natural surroundings, implementing sustainable architecture along with smart city technologies while “minimizing [the] environmental impact.”
It will incorporate renewable power generation and rainwater harvesting, and will also prioritize the use of locally sourced and recycled materials, Zaha Hadid Architects said.
A detailed design for the proposed city is expected in 2025.
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