Prime Minister Anwar Ibrahim's Ambitious Strategy for Malaysia: Zero Per Cent Tax Rate in Forest City

Prime Minister Anwar Ibrahim's Announcement

On Friday, Malaysia unveiled a groundbreaking zero per cent tax rate aimed at luring Asia's affluent individuals to establish family offices in the Forest City Special Financial Zone (SFZ). This initiative represents Prime Minister Anwar Ibrahim's strategic effort to rejuvenate the US$100 billion Forest City project, which has faced significant hurdles in attracting investment, particularly from China.

The Incentives Behind the Move

The zero per cent tax rate is a key element of a *Single Family Office Scheme* scheduled to launch in early 2025, aimed specifically at high net worth individuals from Malaysia and neighboring countries. Second Finance Minister Amir Hamzah Azizan highlighted the attractive governance and infrastructure opportunities available in the SFZ.

Comparative Attraction

• Singapore recently managed US$1.3 trillion in offshore assets, prompting Malaysia to seize the opportunity.
• Malaysia’s Securities Commission is set to announce further regulations supporting family offices in conjunction with the 2025 budget.

Additional Tax Benefits

Besides the zero to five per cent corporate tax rate, Malaysia's SFZ will introduce a special 15 per cent tax rate for skilled workers and a 5 per cent rate for financial services, aiming to enhance investment and corporate growth.

Future Outlook

The SFZ's framework is designed to also promote financial technology and corporate business, attracting further international interest as foreign banks will be able to expand in the region. This initiative highlights Malaysia's aim to restore investor confidence in the troubled Forest City project and many see this as a significant moment for Malaysia's financial landscape.