KUALA LUMPUR: The incentive packages for Forest City (FC) Special Financial Zone (SFZ) will likely lure international capital to FC - especially high-net-worth individuals (albeit perhaps not the ultra-rich segment) - in the region.
RHB Investment Bank Bhd (RHB IB) said the government’s intention to revive FC is very clear, adding that the incentive packages will also attract interest from local asset management companies, financial institutions and high-net-worth individuals.
"We understand that there are already a few Singapore-based financial institutions expressing interest in the SFZ, pending the official guidelines released by the Securities Commission over the near term,” it said in a research note today.
RHB IB said if the ecosystem (regulations and infrastructure) is well established, the push for family offices makes sense given FC’s proximity to Singapore, which has been a hub for family offices in the region.
"Over time, we believe there will be an additional need for more office space within FC and the existing residential properties there will be occupied gradually.
"Apart from the conducive macroeconomic environment (stable interest rates, better economic growth, stronger ringgit), the government economic incentives for special zones and the influx of investments should continue to buoy market sentiment on property stocks,” it added.
Last Friday, the government unveiled tax and other incentives for the FC SFZ - offering the "ghost town” a much-needed revitalisation.
Meanwhile, in a separate note, Hong Leong Investment Bank Bhd said the potential flourishing of family offices in Malaysia should be positive for Bursa’s average daily trading in the long run.
It noted that the zero per cent tax incentive for family offices within FC SFZ which is expected to be rolled out in the first quarter of 2025 will be the first of its kind in Malaysia.
Previously, Finance Minister II Datuk Seri Amir Hamzah Azizan said the zero per cent tax rate will be accorded to family offices for 10 years and requires a minimum asset under management of RM30 million.
"Overall, we believe this move will help to establish FC as a cheaper and more tax-efficient alternative to Singapore for family offices.
"In Singapore, the number of single-family offices grew from 400 in 2020 to 1,400 in 2023 and 1,650 as of August 2024, and given that FC is developed by Country Garden - one of China’s largest property developer - it could potentially attract family office setups from China,” it said. - Bernama
