Annyeong, investors: ‘Strategic’ JS-SEZ projects can get customised incentives, says Malaysian official

[SEOUL] Foreign investments with strategic significance for Malaysia could receive customised incentives beyond tax perks when entering the Johor-Singapore Special Economic Zone (JS-SEZ).

These might include talent incentives or import duty exemptions, said Ruhizam Idris, director at the Malaysian Investment Development Authority (Mida) Seoul.

He added: “We will request (from) investors… their wish list. What do you want from us? What would you want from me?”

Rather than having a fixed minimum investment quantum, Mida will assess projects to see if they are of “strategic” importance. For this, the agency will consider factors such as a project’s ability to spur local employment through spillover, noted Ruhizam.

In February, Mida – Malaysia’s principal agency promoting investments in manufacturing and services – announced new tax incentives for companies investing in the JS-SEZ.

As part of these measures, Ruhizam said the agency is also open to flexibility on details such as the tenure of tax breaks, which can be tailored according to a project’s requirements.

He was speaking to reporters on the sidelines of the Korea-Asean Business Forum on Wednesday (Mar 26) at The Shilla Seoul. The forum was co-hosted by UOB, law firm Kim & Chang and professional services firm Samil PwC.

Ruhizam added that “almost 10” South Korean firms have queried Mida about potential investments in the JS-SEZ, but noted that customised incentives will not be limited to only South Korean businesses.

Most interested companies belong to the logistics sector, and are planning warehouses and similar facilities in the JS-SEZ to serve as hubs to facilitate distribution to Asean markets.

South Korea – Asia’s fourth-largest economy – is a prominent manufacturing hub.

Eyeing expansion

Among interested parties is dental implant manufacturer Onecera. Chief executive officer Park Jay-suk plans to invest up to US$10 million in a production facility within the zone in the next two to three years.

Dr Park intends to tap JS-SEZ’s lower tax rates, as well as its potential as a distribution hub, to serve dentists across Asean. He is also exploring setting up an education centre at the same facility for dentists from the region to learn more about the company’s products.

The proposed JS-SEZ facility will supplement Onecera’s existing 6,000-square-foot production plant in Bucheon, South Korea. 

With the additional facility, annual production capacity will treble to 300,000 implants, Dr Park told reporters on the sidelines of Wednesday’s forum.

Onecera, which employs around 20 staff in South Korea, specialises in titanium tooth implants – a design Dr Park personally holds a patent on.

Initially, the dentist-turned-entrepreneur considered establishing operations in Singapore but found land prices in the Republic too high for what he intends.

Entering the JS-SEZ will allow Onecera to benefit from the lower operating costs in Johor, while retaining proximity to Singapore, explained Dr Park.