Malaysia and Singapore announced on Tuesday an agreement on a special economic zone in the southern Malaysian state of Johor, aiming to support investment and free up movement of goods and people between the countries.

More Singapore businesses are making enquiries about entering the Johor-Singapore Special Economic Zone (SEZ) following the signing of the bilateral deal during the Malaysia-Singapore Leaders’ Retreat.

The Johor-Singapore Special Economic Zone (JS-SEZ) will bring a positive transformation to the state, says Mentri Besar Datuk Onn Hafiz Ghazi.

While Singapore has one of the lowest corporate income tax rates in the region at 17%, companies in Malaysia pay between 15% and 24%. "Malaysia and Singapore agree to special economic zone in Johor" was originally created and published by Investment Monitor, a GlobalData owned brand.

The JS-SEZ has a higher chance of success than past projects such as Iskandar Malaysia – launched in 2006 and conceptualised as a southern economic growth corridor – given the involvement of the Singapore Government, which brings to the table better governance, he noted.

Malaysia unveiled a slew of tax incentives to lure investors to its joint special economic zone with Singapore that seeks to add $26 billion per year to the Malaysian economy by 2030.