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[KUALA LUMPUR] Malaysia’s southernmost state Johor became the country’s top investment destination in the first half of 2025, with officials attributing the success to its special economic zone with neighbour Singapore.

Johor recorded RM56 billion in approved investments in the January-June period, accounting for nearly a quarter of the total figure for the country, according to the Malaysian Investment Development Authority in a statement on Friday (Aug 22). 

“This reflects the state’s strengthening economic fundamentals, driven by initiatives such as the Johor–Singapore Special Economic Zone,” Investment, Trade and Industry Minister Zafrul Aziz said in the statement. 

Selangor, home to industrial parks, came in second with RM34.7 billion (S$10.57 billion), it said. This was followed by the capital city of Kuala Lumpur and Penang, Malaysia’s semiconductor hub. Overall, approved investments in Malaysia jumped 18.7 per cent year-on-year in the first half of 2025 to RM190.3 billion.

Modelled after China’s Shenzhen, the special economic zone was formally inked in January and almost immediately helped catapult Johor into an investment hub – the state also topped first-quarter numbers. Key to its appeal is a slew of incentives, including special company tax rates of 5% for 15 years and lower income taxes for knowledge workers. 

Johor’s investment numbers had more than quadrupled in the first half of 2025 from RM13 billion in the same period last year thanks to the special economic zone, the state’s executive councillor for investments, Lee Ting Han, said in a Facebook post. 

“This performance is proof that Johor is not only the top choice for investors today, but is also building its future as the region’s new economic powerhouse,” he said. BLOOMBERG