DUTY-FREE zone status and other incentives were announced yesterday by Malaysian Prime Minister Najib Razak for the Forest City four-island project in the Strait of Johor with the aim of spurring business activities, local and foreign media reported.
One sweetener targets qualified companies or firms with Iskandar Development Region (IDR) status involved in tourism and Mice, education and healthcare, which would enjoy tax breaks if they set up shop in the mixed-use green development.
This is likely to be the largest in South-east Asia on completion, reported the Business Wire.
Read also: Johor to be new economic powerhouse: Najib
Mice - which means meetings, incentives, conferences and exhibitions - is a type of tourism which can spin off benefits for many sectors of the economy.
Forest City, a joint multi-billion-dollar eco-city project by China's Country Garden Holdings and Johor's Esplanade Danga 88, is within the IDR.
Tax incentives would also be granted to Green Developers and Green Development Manager, and there would no restrictions on company equity for foreign investors claiming corporate incentives, said Mr Najib.
The announcements were made in Iskandar Puteri at a grand ceremony for the official opening of the project by the Sultan of Johor.
"These packages are designed to ensure the success of the Forest City project based on its masterplan and target of becoming a smart and green city," the Bernama news agency quoted Mr Najib as saying.
He expressed hope that the incentives would be able to help contribute RM175 billion (S$59 billion) in foreign direct investments by 2035.
He said the city is expected to create 220,000 jobs for Malaysians in high-value sectors such as finance and e-commerce in the next 20 years.
The project, which began in 2013 and is about three times the size of Sentosa, is the first overseas venture of Country Garden.
Among the upcoming amenities in the city, which will likely take 30 years to complete, is its first duty-free shopping mall.
It is scheduled to open at the end of this year on Island 1.
Condominiums and high-rise coastal residences in Island 1 are already open to the public for previews and bookings.
Meanwhile, Singapore's Ministry of the Environment and Water Resources has reiterated concern that land reclamation work for some Malaysian projects in the Strait of Johor has begun without the needed studies on potential environmental impacts.
The ministry did not name Forest City when it raised the issue again last month but it revealed that Singapore is analysing the environmental impact assessments report provided by Malaysia for the project.
The project's reclamation work near Tuas was suspended in June 2014 but Malaysia restarted it in January last year.