ISKANDAR PUTERI, Sept 20 — Forest City will be the first location in Malaysia to offer a zero tax on family wealth offices as part of its incentive packages.

Finance Minister II Datuk Seri Amir Hamzah Azizan said zero tax on family wealth offices was among the incentives to turn Forest City a magnet for international capital.

He added that Forest City would be the first location in Malaysia to offer this incentive.

Amir Hamzah said among the other incentives include a concessionary corporate tax rate between zero and five per cent, and a special individual income tax rate of 15 per cent for knowledge workers and Malaysians, who choose to work there.

"These incentives are expected to attract businesses, financial institutions, and high-net-worth individuals, further augmenting Forest City’s position as a preferred investment destination,” he said in his speech during the launch of the incentive package for Forest City Special Financial Zone (SFZ).

Johor Regent Tunku Ismail Sultan Ibrahim graced the event that was also attended by Johor Menteri Besar Datuk Onn Hafiz Ghazi.

Amir Hamzah said the single-family office scheme, coordinated by the Securities Commission Malaysia, was aimed to attract regional and Malaysian families to manage their family wealth from the country.

He said there is an estimated 8,030 single-family offices globally today and it is projected to grow by 75 per cent to more than 10,720 by 2030.

"Total estimated assets under management of family offices are expected to rise to US$5.4 trillion (RM22.6 trillion) from US$3.1 trillion by 2030,” he said.

Amir Hamzah added that the establishment of family offices will broaden the investor base to channel private capital into high-growth, high-value sectors.

"This is highly complementary of the ministry’s GEAR-uP initiative where the collective strength of government linked-investment companies (GLICs) is harnessed to catalyse economic growth through domestic investments.

"Hence, as we open our doors to welcome family offices, we are also inviting them into the good company of potential partners in the form of our GLICs and other institutional funds, and to partake in high-growth, high-value investments through venture capital and private equity opportunities,” he said, adding that Forest City SFZ presents untapped potential as an ideal business support location.

Amir Hamzah also added that Malaysia’s banking institutions, insurance, capital market intermediaries and other eligible financial sector entities will also enjoy incentives that include special deductions on relocation costs, enhanced industrial building allowances and withholding of tax exemptions.

He said with the support of Bank Negara Malaysia, locally incorporated foreign banks will enjoy regulatory flexibilities to open additional branches within the Forest City SFZ, and also benefit from foreign exchange flexibilities for offshore borrowing in foreign currency and investment in foreign currency assets.

Amir Hamzah said Forest City SFZ has the potential to drive growth from Johor into the rest of the Asean region through robust participation by local and international stakeholders.

"Forest City SFZ also has the potential to mature into a globally recognised financial hub, the likes of Shenzhen in China and Dubai International Financial Centre in the UAE,” he said.

On August 25 last year, Prime Minister Datuk Seri Anwar Ibrahim announced the formation of SFZ in Forest City and incentives to boost Johor’s economic activities and surrounding areas.

He hinted the Forest City SFZ would offer tax breaks and easy visa access for foreign professionals living in Singapore to travel to and from south Johor, where Forest City is located.