Forest City: A Policy Haven and Strategic New Choice for Family Offices in Asia-Pacific

In the global wealth management landscape, the Asia-Pacific region is emerging as a new growth hub for family offices. With traditional financial centers such as Singapore and Hong Kong facing tighter regulation and rising costs, ultra-high-net-worth families are increasingly seeking alternatives that offer more favorable policies and convenient locations. Situated in Johor, Malaysia, the Forest City Special Financial Zone (SFZ) is stepping into the spotlight with its targeted tax incentives and unique geographic advantages.

Differentiated Tax Competitiveness

Forest City’s SFZ has created a tailored tax framework for family offices, establishing a clear comparative advantage in the Asia-Pacific region.

In terms of asset thresholds, Forest City requires a starting asset under management of MYR 30 million (approximately SGD 9.06 million), which is significantly lower than Singapore’s SGD 20 million requirement. This threshold not only reduces the initial cost of setting up family wealth management operations but also maintains a standard for high-quality clients.

Complementary policies further enhance the appeal. Investment managers, financial advisors, and other knowledge-based professionals working in the SFZ benefit from a 15% personal income tax rate, roughly 15 percentage points lower than Malaysia’s top bracket. In addition, family offices enjoy zero corporate income tax for up to 20 years. This combination of corporate tax relief and talent-focused incentives creates a comprehensive cost advantage, significantly reducing the overall operating burden of family offices.

Strategic Location and Multi-Dimensional Advantages

Geography is another cornerstone of Forest City’s competitiveness. Located in Johor Bahru within the Iskandar Malaysia economic corridor, Forest City lies just 2 kilometers from Singapore and is connected by a cross-border bridge, enabling rapid access between the two countries.

More strategically, Forest City has been incorporated into the Johor-Singapore Special Economic Zone (JS-SEZ) joint development plan. This cross-border economic framework allows family offices to simultaneously benefit from Malaysia’s policy incentives and Singapore’s market influence. As JS-SEZ infrastructure continues to advance, Forest City’s locational advantages will become even more pronounced.

The zone also includes a dedicated Malaysia My Second Home (MM2H) program tailored for family office members. Existing property owners can directly apply for MM2H, while non-owners can qualify with a minimum property purchase of MYR 500,000. This seamless link between residency and investment strengthens Forest City’s appeal to cross-border families.

Building a Sustainable Financial Ecosystem

Forest City’s policies are not stand-alone measures but part of a mutually reinforcing financial ecosystem. Beyond family offices, fintech and related enterprises can also apply for corporate income tax rates as low as 5%, with benefits lasting up to 20 years. This coordinated approach fosters an ecosystem that provides family offices with local service providers and potential collaboration opportunities.

At the same time, Forest City has been designated Malaysia’s fifth duty-free island and the first with land access, with plans to gradually implement island-wide duty-free policies. This will further lower both transaction and living costs in the area. Meanwhile, the approval of Malaysia Digital (MD) status opens the door for family offices to invest in emerging fields such as artificial intelligence and blockchain.

Whether for family living, wealth allocation, or industry investment, Forest City offers significant advantages. As the region continues to develop and mature, Forest City is poised to take on an increasingly important role in the landscape of family wealth management and legacy planning in Asia-Pacific.