Tax Perks For Developers In IDR

Source : The Straits Times, Oct 10, 2007

Investors in special zone also exempted from bumiputera ownership quotas

PUTRAJAYA - HOPING to woo bigger investors after some major successes, Malaysia yesterday announced that developers investing in south Johor's economic zone will be given incentives that include a 10-year tax holiday.

Prime Minister Abdullah Badawi announced that existing incentives will be extended to developers, companies undertaking management and marketing for the developers, and expatriates in the Iskandar Development Region (IDR).

The incentives include tax exemptions on income from the sale of land and rental and sale of buildings, as well as exemption on withholding taxes.

They are also exempted from bumiputera quotas in corporate equity ownership and property sales, and are free to source for capital globally and to employ foreign workers.

'Since private investments will be the main catalyst of growth, there is a need to offer investors attractive fiscal and non-fiscal incentives,' Datuk Seri Abdullah said after chairing a meeting of the Iskandar Development Region Authority yesterday.

The incentives were initially confined to companies involved in the creative, education, finance, health, logistics and tourism sectors.

Officials said only developers investing in an area called Node 1 located within Nusajaya will qualify for the perks. The area is about 30km west of Johor Baru and just after the Second Link at Tuas.

Node 1 is about 9 million sq m in size, and is a development comprising leisure, residential, financial and high-end industrial components.

A group of Middle Eastern investors recently signed deals to commit US$1.2 billion (S$1.8 billion) to the area.

Together, the deals make up the single biggest foreign real estate investment in Malaysia.

Recently, Dubai World and Malaysian group MMC also proposed to build a US$4.7 billion maritime park in the IDR.

Asked about fears that local investors were being left out, Datuk Seri Abdullah said the government wanted Malaysians to participate as well.

'This corridor is (also) for local investors. They should also participate. We also accept proposals from local investors,' he said.

The IDR aims to leverage on its proximity to Singapore. It has an area 21/2 times the size of the Republic and Malaysia has it targeted as its next fast-growth area by attracting foreign investors.

Officials said only developers investing in an area called Node 1 located within Nusajaya will qualify for the perks. The area is about 30km west of Johor Baru and just after the Second Link at Tuas.

Node 1 is about 9 million sq m in size, and is a development comprising leisure, residential, financial and high-end industrial components.

A group of Middle Eastern investors recently signed deals to commit US$1.2 billion (S$1.8 billion) to the area.

Together, the deals make up the single biggest foreign real estate investment in Malaysia.

Recently, Dubai World and Malaysian group MMC also proposed to build a US$4.7 billion maritime park in the IDR.

Asked about fears that local investors were being left out, Datuk Seri Abdullah said the government wanted Malaysians to participate as well.

'This corridor is (also) for local investors. They should also participate. We also accept proposals from local investors,' he said.

The IDR aims to leverage on its proximity to Singapore. It has an area 21/2 times the size of the Republic and Malaysia has it targeted as its next fast-growth area by attracting foreign investors.


Beware of S'pore takeover: PAS

A LEADER of fundamentalist Islamic party PAS said Malaysia's 'black history' may be repeated if the government does not prevent Singapore from gaining control of the Iskandar Development Region (IDR).
Mr Salahuddin Ayub, youth chief of Parti Islam SeMalaysia (PAS), was referring to the 'handover' of Singapore by former premier Tunku Abdul Rahman to Mr Lee Kuan Yew.

'The Abdullah government may similarly hand over the IDR to Singapore, when Singapore's political power in the IDR becomes so strong that the easiest way out would be for the Malaysian government to release the region to Singapore,' he was quoted as saying in the Oct 16 issue of PAS' party newspaper, Harakah.

Mr Salahuddin was echoing the fear among some Umno and Malay leaders, including former premier Mahathir Mohamad, that attracting Singaporean investments to the IDR could lead to the Malays losing control of southern Johor.

'If this happens, it would be a black spot in our history when yet another Malaysian territory falls into the hands of a foreign power,' Mr Salahuddin said at a political talk in a village in the Johor town of Pontian.

He said the zealous pursuit of development by Malaysian leaders without regard for adverse consequences would result in losing yet another Malaysian territory.

'If this happens, it would be because the leaders running this country are weak,' he said.

Mr Salahuddin, who is also a Kelantan Member of Parliament, urged Malaysians to think through the issue deeply.

'The people must act before it's too late,' he said.