CIMB Research said Johor secured RM30.1bil in approved investments in the first quarter of 2025.
PETALING JAYA: Johor took the lion’s share of total investments, with investors pouring in money as the state leveraged growth opportunities from the launch of the Johor-Singapore Special Economic Zone (JS-SEZ) earlier this year.
CIMB Research said the state secured RM30.1bil in approved investments in the first quarter of 2025 (1Q25), or one-third of the country’s total, with RM26.9bil comprising foreign direct investment (FDI), driven by JS-SEZ initiatives and pro-business reforms.
The state government targets RM60bil to RM100bil for approved investments this year, from the record RM48.5bil secured last year.
The research house said Singapore was the largest investor in 1Q25 with 65 projects amounting to RM28.3bil in approved FDI, beating other contenders such as the United States (RM9.9bil) and China (RM7.9bil) to bring in 33,000 jobs.
“Many new projects involved Singaporean capital or targeted Singapore-related demand, continuing a trend from 2023 when Singapore was Malaysia’s top FDI source.
“Firms are increasingly ‘twinning’ operations – retaining headquarters in Singapore while expanding manufacturing or data infrastructure in Johor to leverage lower costs and SEZ incentives,” it noted, adding that improved facilitation also contributed to the strong results, reducing approval times to one month from three months.
“Additionally, a large share of these investments focused on high-impact sectors such as logistics, data centres (DCs), and modern business services, in line with Johor’s shift toward digital and high-value industries.
“Several major DC campuses began construction, reinforcing Johor’s reputation as a data infrastructure hub for South-East Asia,” it said.
Investor optimism in 1Q25 was also spurred by expectations of better connectivity with Singapore, with projects such as the Rapid Transit System Link, due for completion in 2026, and the potential revival of the Kuala Lumpur-Singapore High Speed Rail signalling major logistics improvements.
To enhance the seamless flow of goods and talent, land checkpoints have also seen improvements such as automated immigration lanes and QR code clearance systems. CIMB Research said there has also been a notable improvement in the national investment realisation rates, which rose to 93% in 1Q25 from 89% in 1Q24, reinforcing the country’s credibility in executing approved projects.
“More impressively, Malaysia’s FDI realisation rate doubled to 26% from 11% during the same period, underscoring stronger investor confidence and better implementation support,” it said.
While the JS-SEZ aims to attract 50 high-impact projects in the first five years and 100 projects over 10 years, there continue to be challenges, the research house said, pointing to talent retention and the wage gap between the state and neighbouring Singapore as among the issues.
Furthermore, it said Johor must also compete on non-tax factors like reliability, talent, and ease of doing business, given the rise of SEZs in Indonesia, Vietnam, and Thailand.
