Singapore, Malaysia weigh passport-free travel to boost commerce

Malaysia and Singapore agreed to jointly develop a special economic zone and explore a series of measures including passport-free travel to boost trade between the neighbors who each count the other as the No. 2 trading partner.

The pact to establish the area – where businesses operate with little regulation or government interference – in Malaysia’s southern state of Johor will increase business activity and improve connectivity, according to a joint statement.

The Minister of Economy of Malaysia Rafizi Ramli and the Minister of Trade and Industry of Singapore, Gan Kim Yong, signed the agreement on Thursday in the presence of the prime ministers of the two countries.

The Johor-Singapore Special Economic Zone “will herald the beginning of a transformative chapter in our bilateral economic relations,” Rafizi said in the statement.

Malaysia and Singapore will explore measures that will support the special economic zone, including a system of issuing passport-free QR codes on both sides to improve the speed of clearing people at ground checkpoints.

Malaysia and Singapore share one of the most open borders in the world. Their bilateral merchandise trade will total $90.3 billion in 2022, which is more than the total trade they each enjoy with Indonesia, Thailand, the Philippines and Vietnam combined. The highway connecting Johor and Singapore sees more than 350,000 travelers every day.

Singapore was also the second source of foreign direct investment in Malaysia in the first nine months of 2023 at 20.4 billion ringgit ($4.4 billion).

Neighbors also agreed to find out:

-A one-stop business investment service center in Johor for Singapore companies to set up in Johor
– Adopt digitized processes for cargo release at ground control points
– Co-organizing an investor forum as well as facilitating Malaysia-Singapore renewable energy cooperation in JS-SEZ
-The neighbors first commemorated the completion of a connecting span for a new rail link, which is expected to start passenger service from —- December 2026 and have a maximum capacity of 10,000 passengers per hour per direction.

Malaysian stocks with substantial exposure to the state of Johor advanced in the weeks before the signing of the memorandum.

Malaysia’s incoming monarch Sultan Ibrahim Sultan Iskandar, who hails from Johor, also said he plans to use his influence to improve infrastructure, including the high-speed rail project with Singapore.