The Forest City Special Financial Zone (SFZ) is seen as a major step toward establishing itself as a regional financial hub, leveraging its strategic location in Southeast Asia.
TA Securities said its proximity to Singapore, a leading financial hub both regionally and globally, positions the SFZ as a natural complement to Singapore’s well-established financial sector.
“This could drive a spillover in demand for investments and financial services. Additionally, its location within the Johor-Singapore Special Economic Zone (JS-SEZ) strengthens its potential for economic integration and allows it to capitalise on the JS-SEZ’s potential growth,” it said.
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The firm highlighted foreign exchange flexibility as a key feature, enabling unrestricted offshore borrowing and investments in foreign currency assets.
Additionally, it offers strong incentives for sustainability-focused initiatives and attractive tax benefits, fostering a conducive environment for various financial services, including fintech companies and family offices.
“We believe these measures could help attract high- to ultra-high-net-worth individuals. Preferential tax rates for returning experts and knowledge workers could help deepen the local talent pool and mitigate brain drain, thus further strengthening the SFZ’s financial ecosystem,” it adds.
However, TA Securities said competition among local banks in Johor will likely intensify as locally incorporated foreign banks, such as UOB and OCBC, each already having around seven branches in Johor, will enjoy regulatory flexibility to open additional branches within the SFZ.
Source: NST Online
