Malaysia unveils zero tax rate for family offices in Forest City

Zunaira Saieed Malaysia Correspondent

- Zunaira Saieed

Malaysia on Sept 20 announced a 0 per cent tax rate for family offices located in Forest City, as part of incentives to draw capital to the special financial zone in its southern state of Johor.

Finance Minister II Amir Hamzah Azizan said Forest City will become the first site in Malaysia to implement the 0 per cent tax rate for family offices, or private asset management firms that serve wealthy individuals and their families. This initiative is expected to be operational by the first quarter of 2025.

The move is part of a slew of incentives targeted at reviving Forest City, a beleaguered US$100 billion (S$129 billion) development project located a stone's throw from Singapore, an established financial hub.

The 2,800ha development, backed by Chinese developer Country Garden Holdings, was designated a special financial zone (SFZ) in August 2023 to boost foreign investment and economic growth in the area.

Datuk Seri Amir Hamzah said that the tax break is aimed at drawing families from Malaysia and other Asian countries to oversee their wealth management from Malaysia.

“Supported by good infrastructure, a competitive talent pool, robust common law practices and effective governance, opportunities abound for family offices,” he added, at the event in Forest City to launch these measures.