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FAQ

ISKANDAR MALAYSIA is the new southern development corridor in Johor that has been identified as one of the catalyst developments to spur the growth of the Malaysian economy.

ISKANDAR MALAYSIA covers 221,634 hectares (2,217 sq km) of land area within the southern-most part of Johor. The development region encompasses an area of about 3 times the size of Singapore and 2 times the size of Hong Kong. ISKANDAR MALAYSIA covers the entire district of Johor Bahru (including the island within the district), Mukim Jeram Batu, Mukim Sungai Karang, Mukim Serkat and Kukup Island in Mukim Ayer Masin, all within the district of Pontian.

IRDA is a Federal statutory body established under the Iskandar Regional Development Authority Act 2007.

The primary objective of IRDA is to realise the vision of developing ISKANDAR MALAYSIA into a strong and sustainable metropolis of international standing. Accordingly, IRDA’s main focus and roles are:

  • Establishing policies, directions and strategies that have a direct impact on development activities within ISKANDAR MALAYSIA
  • Coordinating the performance of the activities carried out by Government entities in ISKANDAR MALAYSIA
  • Promoting, stimulating, facilitating, and undertaking development in ISKANDAR MALAYSIA
  • Acting as a “one-stop centre” to deal with investors and responding to investors’ needs in a timely and efficient manner

Six service-based sectors have been identified as new pillars to strengthen existing economic sectors in the region. These will support the attainment of greater long-term growth and stability for the ISKANDAR MALAYSIA economy. The six targeted service-based sectors (as identified in the Comprehensive Development Plan) are as follows:

  • Creative
  • Education
  • Financial advisory and consulting
  • Healthcare
  • Logistics
  • Tourism

Companies undertaking qualifying activities within the above sectors in the approved node within ISKANDAR MALAYSIA will be eligible to apply for IDR-status.

An IDR-status company is a company incorporated under the Companies Act 1965 and approved by MOF and resident in Malaysia which undertakes a qualifying activity in the approved node within Iskandar for customers located within the approved node and outside Malaysia or wholly for customers outside Malaysia.

The qualifying activities will be related to the following 6 categories of service-based sectors:

  • Creative
  • Education
  • Financial advisory and consulting
  • Healthcare
  • Logistics
  • Tourism

Subject to the fulfilment of the pre-requisite criteria set out by IRDA, IDR-status companies will enjoy:

  • Exemption from the Foreign Investment Committee (FIC) rules
  • Flexibilities under the foreign exchange administration rules as follows:
    • Make and receive payments in foreign currency with residents;
    • Borrow any amount of foreign currency from licensed onshore and non-residents;
    • Invest any amount in foreign currency assets onshore and offshore; and
    • Retain export proceeds offshore.
  • Unrestricted employment of foreign knowledge workers
  • Eligibility for tax incentives

The tax incentives are:

  • Exemption from corporate income tax for a period of 10 years in respect of statutory income derived from qualifying activity carried out within the approved node for customers situated within the approved node and outside Malaysia or wholly for customers outside Malaysia. Such activities must commence on or before 31 December 2015; and
  • Exemption from compliance with the withholding tax provisions on payment of royalty and services fee to non-residents for a period of 10 years from commencement of operations.

Yes, such companies may apply for existing tax incentives which are currently available subject to the fulfilment of pre-requisite criteria. Please visit MIDA’s website at www.mida.gov.my for further information.

Yes, it will be possible to employ foreign/expatriate employees with relative ease where such employees are required. For IDR-status companies, approved developers and approved development managers, they are freely allowed to employ foreign knowledge workers.

Yes, each foreign knowledge worker employed by an approved company operating in the node (Medini), is eligible to apply for a duty free car (import or local purchase) for his or her own personal use.

As a knowledge worker working and living within ISKANDAR MALAYSIA, he or she is also eligible to also apply for the 15% tax rate scheme for Iskandar Malaysia knowledge workers, subject to prevailing terms and conditions.

No, they will not enjoy any special income tax incentives/exemptions. These individuals will be subject to the general income tax law.

While foremost on the national agenda is the development and training of a skilled and capable workforce among Malaysians, the Government recognises that in some instances, foreign expertise and labour are required. Therefore, a foreigner may work in Malaysia provided that the pre-requisite criteria are met such as the qualification of the foreign individual, the profile of the employer and the sector/industry. No restriction will be imposed on IDR-status companies, approved developers or approved development managers with respect to hiring of foreign knowledge workers.

All foreigners who intend to work in Malaysia must first obtain the necessary permit or pass from the Immigration Department of Malaysia. The type of permit or pass required depends on which of the following 3 categories the foreigner falls into:

  • expatriate personnel, who require an Employment Pass;
  • foreign unskilled/semi-skilled workers, who require a Visit Pass (Temporary Employment); and
  • foreign skilled workers, who require a Visit Pass (Professional).

The necessary permit or pass is to be obtained before the individual comes to Malaysia. Further information can be obtained at http://www.imi.gov.my.

Artists, missionaries, experts or volunteers are allowed to work on a short-term basis after having obtained a Visit Pass (Professional). The validity of the Visit Pass (Professional) varies but under normal circumstances, it will not exceed 12 months. The applicant must be outside Malaysia when the application is made.

Entry will only be allowed upon approval of the pass.

Foreign visitors entering the country with a valid passport and visa can obtain a Visit Pass (Business) which is issued solely for the purpose of a social and/or business visit such as:

  • owners and company representatives entering Malaysia to attend a company meeting or seminar, to inspect the company’s accounts or to ensure the smooth running of the company
  • investors or businessmen entering to explore business opportunities and investment potential
  • foreign representatives of companies entering Malaysia to introduce goods for manufacture in Malaysia, but not to engage in direct selling or distribution
  • property owners entering Malaysia to negotiate, sell or lease properties
  • foreign reporters from mass media agencies entering Malaysia to cover any event in Malaysia
  • participants in sporting events

A Visit Pass (Social) cannot be used for employment.

The travel procedures and immigration requirements are currently unchanged. However, the Governments of Malaysia and Singapore are currently working on a simplified immigration procedure.

ISKANDAR MALAYSIA, as a whole, is not a duty free zone. However, there are certain areas within ISKANDAR MALAYSIA which have been accorded free zone status

Yes, ISKANDAR MALAYSIA is open to all Malaysians. In order to qualify for IDR-status, Malaysian-owned companies are subject to the same criteria as other parties.

No, IDR-status companies are not required to have 30% Bumiputra equity.

All enquiries can be directed to IRDA by sending an e-mail to enquiries@irda.com.my

The Companies Act 1965 and all the relevant procedures will similarly apply to all companies operating in ISKANDAR MALAYSIA. There are no special incorporation rules for IDR-status companies.

Yes, the tax administration system for all companies operating in ISKANDAR MALAYSIA is the same as that for all other companies operating outside ISKANDAR MALAYSIA.

Please contact:

Main office:
#G-01, Block B,
Danga Bay, Jalan Skudai,
80200 Johor Bahru, Johor
Malaysia.
T +607 233 3000
F +607 233 3001

Satellite office:
Iskandar Regional Development
Authority (IRDA)
Level 12-1, Mercu UEM
Jalan Stesen Sentral 5, Kuala Lumpur Sentral,
50470 Kuala Lumpur MALAYSIA
T +603-2260 6777
F +603-2260 7999