Our close proximity and inseparable history and culture means that Singapore and Johor share strong bilateral ties.
Singapore and Johor are one of each other’s largest trade partners, having recorded bilateral trade amounting over US$78.59 billion in 2024, an over 6.7% increase from 2023.
Now, Singapore and Johor’s trade collaborations are expected to be further boosted as they officially signed the Johor-Singapore Special Economic Zone (JS-SEZ) on 7 January 2025.
This will be a boon for many businesses, and here are 10 business sectors that stand to benefit from the JS-SEZ.
#1 Construction
The construction sector is expected to be a big winner of the JS-SEZ deal. Already, major projects such as the Rapid Transit System (RTS) Link are in progress and more infrastructure projects are potentially in the pipeline to further improve connectivity across one of the world’s busiest land borders.
Construction companies also stand to benefit from possible inflow of projects for transit-oriented development (TOD) and mixed-use development around the area of Bukit Chagar station in Johor, which will connect to Woodlands in Singapore via the RTS Link train.
#2 Manufacturing
Manufacturing is one of the economic sectors outlined in the JS-SEZ agreement as key areas for collaboration.
Singapore is the world’s fifth largest global exporter of high-tech goods, with companies such as Micron, Infineon and HP setting up next generation facilities in the country. Meanwhile, Johor is a rising manufacturing destination in Malaysia, with a strategic location and established infrastructure such as ports, airports and rail roads.
Johor recorded RM31billion (S$9.3million) in FDI, with Singapore and the US as the main investors in the manufacturing sector in 2023. Manufacturing companies will benefit from JS-SEZ by tapping into the complementary strengths offered by Singapore and Johor.
#3 Data Centres
Singapore has one of the most thriving data centre sectors in the region that serves as business hubs to international companies.
Data centres in Singapore that are looking to diversify their operations may be eyeing the JS-SEZ to take advantage of its vast land and lower-cost and abundant resources.
Currently, there are four data centre parks in JS-SEZ including Sedenak Tech Park, Nusajaya Tech Park, YTL Green Data Centre and Nusa Cemerlang Industrial Park, which are all equipped with hyperscalers and data centre operators.
#4 Energy
Singapore and Johor have also agreed to expand cross-border electricity trade and work together to create a framework for the recognition of sustainable practices to achieve environmental targets.
Through an existing interconnector, Malaysia’s Tenaga Nasional Berhad (TNB) will supply 50MW of renewable electricity to Singapore’s Sembcorp Power Pte Ltd for a duration of two years under the Energy Exchange Malaysia (ENEGEM) pilot project.
Around 15,000 MWh of electricity has been traded under the ENEGEM pilot project.
#5 Logistics
During the initial discussions of the JS-SEZ in early 2024, then Prime Minister Lee Hsien Loong mentioned that the special economic zone should improve cross-border flow of goods.
Both governments have outlined plans to work on digitised processes for cargo clearance at land checkpoints and passport-free QR code system on both sides to expedite clearance of people at checkpoints.
With implementation of such processes, port operators are expected to benefit directly. However, there are still challenges including manpower shortage and travel time across the border that can take two to four hours during holiday periods.
#6 Healthcare
Singapore’s medical services are renowned around the world so much so that even Malaysia’s former Prime Minister Muhyiddin Yassin travelled to the country for his healthcare.
On the other hand, there are Singaporeans who travel to Johor for more basic healthcare services such as dental services will be able to access healthcare services easier once the RTS Link reached completion.
Additionally, as Singapore is one of the fastest ageing populations, it is expected that the healthcare sector is primed to reap benefits from the closer collaboration between Singapore and Johor.
#7 Tourism
The completion of the RTS Link augurs well for the tourism sector as it will mean freer movement of people from both countries.
With a plethora of world-class attractions in Singapore including the Universal Studios Singapore (USS) and the Singapore Grand Prix, Malaysians will be able to travel to the country more conveniently for a holiday.
Vice versa, Singaporeans will be able to travel to Johor to enjoy myriad activities including at tourism venues like Legoland Malaysia and Johor Premium Outlet (JPO).
#8 Education
The JS-SEZ agreement outlines several key areas of cooperation which include promoting and facilitating the expansion of 50 projects within the first five years and a cumulative 100 projects within the first ten years that will bring growth to Malaysia and Singapore, with the intent of creating 20,000 skilled job opportunities in the JS-SEZ.
The JS-SEZ is likely to attract skilled talents from other countries who will be residing in Johor with their families.
The education sector can benefit from the JS-SEZ, with the possibility of international schools and universities similar to those in Iskandar Puteri setting up in the special economic zone.
#9 Electrical & Electronics
The electrical and electronics sector is one of the key focus areas that will be prioritised in JS-SEZ. Singapore is a global advanced manufacturing hub for semi-conductors and wafer chips.
Meanwhile, Johor has the third largest electronics manufacturing sector in Malaysia, only behind Selangor and Penang. The manufacturing sector in Johor may still be focused on back-end processes.
With the JS-SEZ, the electrical and electronics manufacturing sector in Johor could finally realise its full potential.
#10 Finance
With a strong regional presence, banks will be able to benefit from businesses expanding operations in the special economic zone.
For example, as one of the largest banks in Southeast Asia, OCBC has already set up a dedicated team each in Singapore and Malaysia to support SME customers to capture opportunities arising from the JS-SEZ.
The two dedicated teams will comprise 25 experienced bankers in total who will provide advisory services to help the SMEs start and grow their businesses, as well as connect them with suitable partners in the special economic zone.
Read Also: Singapore & Malaysia: 4 Key Statistics That Showcase Our Economic Partnership
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