Singapore and Malaysia will set up special economic zone

People travelling between Singapore and Johor region of Malaysia may soon be able to enjoy passport-free clearance on both sides of the border, as well as digitized processes for cargo clearance at the land checkpoints. These preliminary measures are being explored in anticipation of establishing a new Johor-Singapore Special Economic Zone (SEZ) aimed at enhancing economic connectivity between the two countries.

A Memorandum of Understanding (MOU) was formally signed on January 11 to lay the groundwork for a legally binding agreement on the SEZ. The signing took place in Johor Bahru, with Singapore’s Minister for Trade and Industry Gan Kim Yong and Malaysia’s Minister of Economy Mohd Rafizi Ramli signing the MOU. The ceremony was witnessed by Prime Minister Lee Hsien Loong and his Malaysian counterpart Anwar Ibrahim.

Under the MOU, both nations will investigate various initiatives to advance the SEZ, including expediting the clearance process for individuals at land checkpoints and fostering cooperation in renewable energy between Malaysia and Singapore, as outlined by Singapore’s Ministry of Trade and Industry (MTI) and Malaysia’s Ministry of Economy in a joint statement. This MOU, occurring two months after the 10th Singapore-Malaysia Leaders’ Retreat in October, reaffirms the enduring ties and shared commitment to strengthen economic cooperation between the two countries.

Additionally, both parties have committed to progressing towards a comprehensive agreement for the Johor-Singapore Special Economic Zone (SEZ) and plan to provide an update during the upcoming 11th Malaysia-Singapore Leaders’ Retreat, scheduled to take place in Malaysia later this year.

The initiative to establish an SEZ was initially disclosed when both countries announced the formation of a task force at the 16th meeting of the Malaysia-Singapore Joint Ministerial Committee in July 2023. Subsequently, during the Singapore-Malaysia Leaders’ Retreat in Singapore three months later, Mr. Lee characterized the proposed SEZ as a “significant and promising project.”

As per the joint statement, both nations plan to explore several initiatives as a precursor to the Johor-Singapore Special Economic Zone (SEZ). These initiatives include: establishing a one-stop business or investment service center in Johor, implementing a passport-free QR code clearance system on both sides of the border, introducing digitized processes for cargo clearance at land checkpoints, facilitating cooperation in renewable energy between Malaysia and Singapore within the SEZ, organizing training programs to address talent and skill gaps for industries in the SEZ, or developing joint promotion events between Johor and Singapore to boost trade and investment in the SEZ.

Furthermore, both countries have agreed to formulate a Johor-Singapore SEZ framework that will outline the economic sectors for cooperation and the geographical coverage of the SEZ. The Memorandum of Understanding (MOU) also establishes a Johor-Singapore SEZ Committee, co-led by Singapore’s Ministry of Trade and Industry (MTI) and Malaysia’s Economy Ministry.

Minister Lee and his Malaysian counterpart, Anwar Ibrahim, also marked the 65% construction milestone of the Johor Bahru-Singapore Rapid Transit System (RTS) Link Project. Expected to commence operations in December 2026, the RTS Link will connect Bukit Chagar in Johor Bahru to Woodlands North in Singapore, with a peak capacity of up to 10,000 passengers per hour per direction.