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The agreement emerged from the inaugural meeting of the India-Kuwait Joint Defence Committee in New Delhi on August 28, marking the first formal session of the mechanism created to institutionalise expanding security and military ties.

The talks were co-chaired by Joint Secretary Amitabh Prasad and Brigadier General Raed Alsakran, who headed a five-member delegation from Kuwait. India’s delegation brought together representatives of the Army, Navy and Air Force along with officials from the Department of Defence Production, Defence Research and Development Organisation, Armed Forces Medical Services and Ministry of External Affairs.

Both sides identified training and military exercises as priority areas, opening the possibility of greater exchanges between personnel and institutions. Military medicine and structured staff talks were also placed on the cooperation agenda, potentially creating regular channels through which officers can exchange operational experience and develop closer institutional links.

Defence manufacturing formed another important component of the discussions. The Kuwaiti delegation visited DPSU Bhawan in New Delhi and held talks with representatives of India’s defence industry on potential areas of cooperation. A separate interaction with industry representatives was also included in the delegation’s programme, indicating that commercial and technological partnerships are becoming a stronger part of the bilateral defence relationship.

The engagement gives practical momentum to the memorandum of understanding on defence cooperation signed during Prime Minister Narendra Modi’s visit to Kuwait on December 21-22, 2024. The agreement was designed to institutionalise cooperation in training, exchanges of personnel and experts, joint exercises, defence manufacturing, supply of military equipment and research and development.

That visit also saw India and Kuwait elevate their relationship to a strategic partnership, broadening a relationship traditionally centred on energy, trade and the movement of people. Defence and security have since gained greater prominence as both governments seek more structured engagement amid shifting geopolitical and security conditions across the Gulf and wider West Asian region.

The Joint Defence Committee provides a mechanism through which the provisions of the 2024 agreement can be translated into programmes, exchanges and projects. Its composition also reflects the wide scope envisaged for cooperation, extending beyond conventional military contacts into medical services, technology development and defence manufacturing.

Kuwait has traditionally relied heavily on international suppliers for defence equipment, while India has been expanding its efforts to become a larger producer and exporter of military systems. New Delhi has been encouraging overseas partnerships for domestically manufactured weapons, platforms, electronics and support systems as defence production capacity expands.

Research and development cooperation could therefore become a significant part of the relationship. Participation by the Defence Research and Development Organisation at the committee meeting creates an institutional route for exploring technology-based projects alongside conventional equipment sales and training arrangements.

The talks also come as Kuwait broadens defence engagement with partners across Asia while navigating a complex regional security environment. Its location at the northern end of the Gulf, close to Iraq, Saudi Arabia and Iran, has made military preparedness and diversified security partnerships enduring priorities for the country.

For India, deeper defence engagement with Kuwait complements its expanding strategic relationships with Gulf Cooperation Council states. New Delhi has progressively widened military exercises, naval engagements, training programmes and defence-industry cooperation with countries across the Gulf as economic and energy relationships have developed into broader strategic ties.

Brigadier General Alsakran also laid a wreath at the National War Memorial in New Delhi ahead of the committee meeting, paying homage to fallen military personnel. The gesture formed part of a programme combining official consultations, ceremonial engagements and meetings with defence-sector representatives.

The clarification sets out the eligibility framework for companies considering operations in Pulau 1 of Forest City, where qualifying fintech businesses, Financial Global Business Services operations and foreign-owned payment system operators can apply for the special rate. The incentive runs for 10 consecutive years of assessment and may be extended for another 10 years if the company continues to meet the stipulated conditions.

Malaysia Digital Economy Corporation, or MDEC, is the government agency appointed to process applications, while approvals are subject to the national investment assessment framework. Eligibility does not arise simply from locating a technology business within Forest City.

Qualifying activities must incorporate at least one designated technology enabler. These include artificial intelligence or big data analytics, the Internet of Things, cybersecurity, cloud computing, blockchain, creative media technology, robotics or automation, and advanced network connectivity or telecommunications technology.

The framework therefore covers AI where the technology supports an eligible financial or business-service activity. A general AI developer or technology company does not automatically qualify for the Forest City incentive merely because it uses artificial intelligence.

Applicants must be companies incorporated under Malaysia’s Companies Act and resident in the country, with minimum paid-up capital of RM50,000. The qualifying business must be conducted in Pulau 1, Forest City. Companies must also comply with requirements covering employment, knowledge workers, operating expenditure, economic substance, environmental, social and governance commitments and any regulatory approvals applicable to their activities.

The Forest City incentive is separate from Malaysia Digital Status and the Malaysia Digital tax incentive administered by MDEC. Companies do not need Malaysia Digital Status to apply for the Forest City programme, and an applicant generally cannot receive another tax incentive for the same qualifying activity.

That distinction has become important because the national Malaysia Digital scheme includes figures of up to 100%, potentially creating confusion over whether technology and AI businesses can obtain complete corporate tax exemption in Forest City.

Under the Malaysia Digital tax incentive, companies making new investments can apply for a zero per cent reduced tax rate on qualifying intellectual-property income, subject to the applicable intellectual-property nexus rules. Qualifying non-IP income may receive a 5% or 10% reduced rate for up to 10 years, depending on whether the relevant conditions are met.

Alternatively, eligible new investments can choose an investment tax allowance of 60% or 100% of qualifying capital expenditure, which can be set against up to 100% of statutory income for a period of up to five years. The 100% figure refers to the investment tax allowance and does not constitute a general declaration that all income earned by an eligible company is tax-free.

Companies undertaking qualifying expansion investments face a different structure. The national digital programme provides a 15% reduced tax rate on qualifying IP and non-IP income for up to five years, or an investment tax allowance of 30% or 60% of qualifying capital expenditure, subject to the conditions attached to the scheme.

Applications for the Malaysia Digital tax incentive remain open until December 31, 2027. Applicants for that programme must first secure Malaysia Digital Status. Forest City’s programme has a longer application window, running to December 31, 2034 under the existing guidelines.

Forest City’s financial-zone incentives were formally unveiled by the government in September 2024 as part of an effort to establish Johor as a competitive financial and services hub close to Singapore. The package also includes separate arrangements for single family offices and knowledge workers.

Qualifying single family office vehicles operating under the Forest City framework can obtain a zero per cent tax rate on chargeable income from approved holding and investment activities, subject to Securities Commission Malaysia requirements. That concession is distinct from the 5% regime covering fintech, Financial Global Business Services and foreign payment system operators.

Forest City also sits within the wider Johor-Singapore Special Economic Zone, strengthening its role in Malaysia’s strategy to attract cross-border investment, advanced financial services and digital businesses. Johor has emerged as a major destination for digital infrastructure and technology investment, supported by its proximity to Singapore, expanding data-centre capacity and improving regional connectivity.

Forest City SFZ sets out who may qualify for its 5% special corporate tax rate, how the separate Malaysia Digital tax incentive works, and which activities and conditions apply to each scheme.

JOHOR, MALAYSIA – Media OutReach Newswire – 29 August 2026 – Forest City has, over the past decade, built a recognised track record in green-building and sustainability credentials. Since the Malaysian Government announced the Forest City Special Financial Zone (“SFZ”) incentive package on 20 September 2024, the development has added a financial-services and digital-economy dimension. The Forest City Special Financial Zone (“FC-SFZ”) Tax Incentive offers a 5% special corporate tax rate for 10 consecutive years of assessment, extendable for a second 10-year period, to eligible companies undertaking qualifying fintech, Financial Global Business Services (“FGBS”) or Foreign Payment System Operator (“FPSO”) activities in Pulau 1, Forest City. Malaysia Digital Economy Corporation (“MDEC”) is the appointed government agency to process applications, which are assessed by the National Committee on Investment (“NCI”).

The FC-SFZ Tax Incentive is separate from Malaysia Digital (“MD”) Status and the MD Tax Incentive. A company does not need MD Status to qualify for the FC-SFZ Tax Incentive. Under MDEC’s current rules, an FC-SFZ applicant must also not have been granted another tax incentive for the same qualifying activity. Eligible MD Status companies may separately apply for the MD Tax Incentive, subject to the applicable criteria and approval process.

Key Incentives at a Glance

Forest City’s first decade was defined in part by its green-building and sustainability record. Forest City reports nearly 40 international awards and certifications as at August 2026, including LEED for Core and Shell (“LEED-CS”) Gold pre-certification and GreenRE Gold ratings. On 20 September 2024, the Malaysian Government announced the Forest City SFZ incentive package, adding a financial-services and digital-economy dimension to the development.

The current incentive landscape has four main components:

• Forest City SFZ corporate tax rate: Eligible companies undertaking qualifying fintech, FGBS or FPSO activities in Pulau 1 may receive a 5% special corporate tax rate for 10 consecutive years of assessment, extendable for a second 10-year period, subject to approval and continued compliance. The qualifying activity must use at least one promoted technology enabler specified by MDEC.
• Single Family Office (“SFO”) Scheme: A qualifying Single Family Office Vehicle (“SFOV”) may receive a 0% tax rate on chargeable income from its qualifying holding and investment activities for an initial 10 years, with a possible extension for a further 10 years, subject to the Securities Commission Malaysia (“SC”) requirements.
• Knowledge workers: Eligible knowledge workers working within the Johor-Singapore Special Economic Zone (“JS-SEZ”), which includes Forest City as a designated flagship area, may qualify for a special 15% personal income tax rate for 10 years, subject to the applicable conditions.
• Malaysia Digital tax incentive: This is a separate national incentive administered by MDEC. For New Investment, eligible companies may choose between a reduced tax rate — 0% on qualifying intellectual-property (“IP”) income, subject to the modified nexus approach, and 5% or 10% on qualifying non-IP income for up to 10 years — or an Investment Tax Allowance (“ITA”) of 60% or 100% of qualifying capital expenditure for up to five years. Different rates apply to the Expansion Incentive. Applications are open until 31 December 2027.

Taken together, these measures position Forest City SFZ as a potential regional base for qualifying financial-services and technology-enabled businesses assessing Malaysia’s tax framework, proximity to Singapore and access to ASEAN markets. However, the schemes are separate and should not be treated as automatically cumulative.

Forest City Tax Framework for Fintech and Technology-Enabled Financial Services

The FC-SFZ Tax Incentive is not a blanket 100% tax exemption for fintech, AI or technology companies. It is a 5% special corporate tax rate for qualifying activities under the FC-SFZ framework. MDEC is the appointed agency to process applications, while applications are assessed by the NCI.

The 5% rate applies to qualifying fintech activities, FGBS and FPSO activities carried out in Pulau 1, Forest City. The qualifying activity must utilise at least one promoted technology enabler: artificial intelligence (“AI”) or big data analytics (“BDA”); Internet of Things (“IoT”); cybersecurity; cloud; blockchain; creative media technology, including extended reality (“XR”) or mixed reality (“MR”); robotics or automation; or advanced network connectivity or telecommunications technology. Eligibility is not automatic based on location alone; companies must also satisfy the applicable corporate, activity, substance, regulatory and compliance conditions.

The “up to 100%” figure sometimes cited in relation to Malaysia Digital refers to the ITA available under the MD New Investment Incentive. It is an allowance on qualifying capital expenditure, not a 100% income tax holiday. The MD Tax Incentive is also separate from the FC-SFZ Tax Incentive and should not be assumed to stack with it for the same qualifying activity.

Comparison table:

For accurate and current policy information, companies should refer directly to official sources, including:

• MDEC — Forest City Special Financial Zone (FC-SFZ) Tax Incentive FAQ and application guidance
• MDEC — Malaysia Digital Tax Incentive FAQ and MD Status guidelines
• Securities Commission Malaysia — Single Family Office Incentive Scheme and gazetted tax rules
• Ministry of Finance / MRT Corp — JS-SEZ incentive package and Johor Bahru-Singapore RTS Link information

Malaysia Digital Status and Tax Incentive: A Separate National Framework

MD Status is granted nationally by MDEC. An MD Status company may then be eligible to apply separately for the MD Tax Incentive, subject to the relevant criteria. Under MDEC’s current framework, qualifying Malaysia Digital Activities comprise the research, development or commercialisation of solutions, or the provision of services, using promoted technology enablers such as AI or BDA, IoT, cybersecurity, cloud, blockchain, drone technology, creative media technology, integrated-circuit design with embedded software, robotics or automation, and advanced network connectivity or telecommunications technology.

Under the current MD Tax Incentive, the available options differ between New Investment and Expansion:

• New Investment: A 0% reduced tax rate on qualifying IP income, subject to the modified nexus approach, and a 5% or 10% reduced tax rate on qualifying non-IP income, for up to 10 years; or an ITA of 60% or 100% of qualifying capital expenditure against up to 100% of statutory income, for up to five years.
• Expansion: A 15% reduced tax rate on qualifying IP income, subject to the modified nexus approach, and non-IP income, for up to five years; or an ITA of 30% or 60% of qualifying capital expenditure against up to 100% of statutory income, for up to five years.

The “100%” figure therefore refers to the ITA rate under the New Investment Incentive. It does not mean that all company income is tax-free.

The MD Tax Incentive is open for applications until 31 December 2027. A company must first obtain MD Status before submitting an application for the MD Tax Incentive.

MD Status also provides access to non-tax benefits under the MD Bill of Guarantees, including the ability to apply for foreign knowledge-worker quotas and passes, subject to the relevant immigration requirements. MDEC’s Expats Service Centre administers the related Foreign Knowledge Worker processes for eligible companies.

Eligibility Summary: Entities, Sectors and Permitted Activities

Forest City SFZ 5% rate

• Activity-based: Qualifying services are limited to fintech-related activities, FGBS and FPSO activities.
• Technology condition: The qualifying activity must utilise at least one promoted technology enabler specified by MDEC, including AI or BDA, IoT, cybersecurity, cloud, blockchain, creative media technology, robotics or automation, or advanced network connectivity or telecommunications technology.
• Location condition: The qualifying activity must be carried out in Pulau 1, Forest City.
• Substance and compliance conditions: Approved companies must meet the conditions set out in their approval letter, including commitments relating to full-time employees, knowledge workers, annual operating expenditure, ESG requirements, relevant regulatory approvals or licences, and annual compliance reporting verified by an independent auditor.

Malaysia Digital (MD) Status and MD Tax Incentive

• Activity-based: MD eligibility is tied to Malaysia Digital Activities that use the promoted technology enablers specified by MDEC. Merely operating an AI, cloud, fintech or digital business does not automatically confer tax-incentive eligibility.
• Status and tax-incentive process: MD Status is granted by MDEC. The MD Tax Incentive is a separate application available to eligible MD or MSC Malaysia Status companies, depending on the relevant incentive category.
• Geographic scope: MD Status is a national programme and does not require a company to be located in Forest City.
• No automatic stacking: MDEC states that an FC-SFZ Tax Incentive applicant must not already have been granted a tax incentive for the same qualifying activity. MDEC also confirms that MD Status is not required to apply for the FC-SFZ Tax Incentive.

Accordingly, companies should assess the FC-SFZ and MD frameworks separately. Any proposed structure involving different activities, income streams or incentive programmes should be verified with MDEC and qualified tax advisers before any combined tax outcome is assumed.

Strategic Rationale: Proximity, Talent Incentives and Regional Access

Forest City’s location proposition is based on three interlocking factors: proximity to Singapore, targeted talent incentives and early investor interest.

• Proximity as operational leverage: Forest City lies approximately 2 km from Singapore at its nearest point, placing qualifying operations close to one of Asia’s major financial and technology hubs. The Johor Bahru-Singapore RTS Link will connect Bukit Chagar in central Johor Bahru with Woodlands North in Singapore. MRT Corp has stated that service is targeted to commence on 31 December 2026. The RTS Link does not serve Forest City directly, so onward road transport between Forest City and central Johor Bahru will still be required.
• Talent as a bundled enabler: Eligible knowledge workers in the JS-SEZ may qualify for a special 15% personal income tax rate for 10 years, while eligible MD Status companies may apply for foreign knowledge-worker quotas and passes through MDEC’s expatriate facilitation framework. These are separate benefits with their own eligibility and approval requirements.

By June 2026, Invest Johor reported that the Forest City SFZ had recorded 260 cumulative investor enquiries through the Invest Malaysia Facilitation Centre-Johor, against an RM2 billion investment target. Separately, the SC reported in October 2025 that six families had received conditional approval under the SFO Incentive Scheme, with indicative assets under management close to RM400 million.

This incentive framework sits alongside Johor’s rapid emergence as a major Malaysian data-centre market. JLL has highlighted strong data-centre expansion in Johor and the wider JS-SEZ, supported by major hyperscale investments and infrastructure development. This broader digital-economy momentum strengthens the regional technology narrative, but it should not be presented as a direct operating benefit or guaranteed outcome for individual Forest City SFZ companies.

Decision Framework: Two Pathways and a Diligence Caveat

The incentive structure is best assessed through two distinct pathways, with a separate due-diligence lens for investors and advisers.

• Pathway A – FC-SFZ presence on Pulau 1: This is relevant to eligible fintech companies, FGBS providers and FPSO businesses that can satisfy the physical-location, activity, substance and compliance requirements. The 5% special corporate tax rate is available for 10 consecutive years of assessment and may be extended for a second 10-year period, subject to continued compliance and approval.

This route may suit businesses that value proximity to Singapore while maintaining qualifying operations in Pulau 1. The RTS Link is expected to improve connectivity between central Johor Bahru and Singapore, but it does not remove the requirement for companies to maintain the approved substance and qualifying activities in Forest City.

• Pathway B – MD Status and MD Tax Incentive nationwide: This pathway may be relevant to eligible digital companies operating elsewhere in Malaysia. MD Status is granted nationally by MDEC, and eligible companies may subsequently apply for the MD Tax Incentive. The applicable reduced tax rate or ITA depends on whether the company applies under the New Investment or Expansion category and on the conditions it meets.

Investors and advisers should note that headline rates are not the same as effective tax rates. The outcome for any entity depends on qualifying activities and income, approved commitments, substance conditions and the specific incentive secured. Groups with annual consolidated revenue of EUR750 million or more may also be subject to Malaysia’s domestic top-up tax rules where the relevant effective tax rate falls below 15%. Tax outcomes should therefore be modelled only after verification against current primary sources and professional advice.

The Verdict

Forest City’s proposition to fintech and technology-enabled financial-services companies is specific and condition-based: a 5% special corporate tax rate for qualifying fintech, FGBS and FPSO activities carried out in Pulau 1 using promoted technology enablers. The incentive runs for 10 consecutive years of assessment and may be extended for a second 10-year period, subject to compliance and approval. It is neither a blanket 5% rate for all AI or technology companies nor a 100% income tax exemption.

Alongside this are the separate SFO Incentive Scheme, which may provide a 0% tax rate for up to 20 years subject to SC requirements; the JS-SEZ’s special 15% personal income tax rate for eligible knowledge workers for 10 years; and the national MD Tax Incentive, which offers different reduced tax rates or ITA options depending on whether an applicant qualifies under the New Investment or Expansion category. Applications for the MD Tax Incentive are open until 31 December 2027.

Reported traction includes 260 cumulative investor enquiries recorded by Invest Johor by June 2026 and six families granted conditional approval under the SFO Incentive Scheme, with indicative assets under management close to RM400 million as reported by the SC in October 2025. Forest City also benefits from proximity to Singapore, while the RTS Link is targeted to commence service on 31 December 2026 between central Johor Bahru and Woodlands North.

For companies and investors, the key question is not simply whether these incentives exist, but whether their exact activities, income streams, location, substance commitments and corporate structure satisfy the conditions required to access them in practice. Current official guidance and qualified tax advice should be obtained before any investment or structuringHashtag: #ForestCity

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