SINGAPORE, March 14— The Forest City, a mega development on four man-made islands in Iskandar Malaysia, has been accorded duty-free area status on March 6, 2016.
This is the first artificial island granted the status in Malaysia compared to the natural islands — Labuan, Langkawi and Tioman.
Thus, what is in store for locals and visitors at this new duty-free area, dubbed South-East Asia’s largest mixed-use green development?
Point to note is that, the ultimate objective of any duty-free area is to encourage trade and tourism in Malaysia.
Labuan, Langkawi and Tioman have been declared duty-free islands on Sept 1, 1956; Jan 1, 1987; and, Sept 1, 2002 respectively.
The three duty-free islands are placed under different Customs Acts whereby Forest City has yet been known which Act it will be governed under.
A check on Customs Department’s website showed that all goods at a duty-free islands normally are duty-exempt except petroleum and petroleum-manufactured products.
However, all types of motorised transportation are dutiable at Tioman.
For Langkawi, cement, marble, rubber and anchovies brought to the island from outside Malaysia will be dutied.
According to Chief Executive Officer of Country Garden Holdings Co Ltd, Mo Bin, the first duty-free shopping mall will be ready by year-end at the Fisherman’s Wharf on Island 1 of Forest City.
The developer said the mall will carry a wide range of leading international brands and products.
By saying that, is the duty-free status caters only to the goods and products that are sold at the shopping mall of Forest City?
Potential buyers are talking about buying condominiums and high-rise coastal residences as offered by the island.
As for now to enjoy the tax exemption at the three islands, local and foreign visitors can stay for a certain hours.
Does Forest City offers such ‘time limit’ as to enjoy the tax-exemption as well?
For Labuan, they have to be in the island not less than 24 hours, while Langkawi and Tioman not less than 48 hours.
A 30 per cent duty will be imposed if you buy goods beyond the stipulated limits.
But for beer or liquor, cigarettes or tobacco, tyres and tubes, the tax will follow a certain rate.
In announcing it, Prime Minister Datuk Seri Najib Tun Razak said the status will spur business activities and tourism on the four islands.
Sprawled over 1,386.05 hectares, Forest City is a joint development between Hong Kong-listed Country Garden Holdings and Johor’s Esplanade Danga 88 Sdn Bhd.
With an estimated investment of S$58.3 billion (S$1 = RM3.00), the mega development would be done in stages over the next 20 years.
Part of the first phase of Forest City includes condominiums and high-rise coastal residences which would open for global sale soon in Malaysia, Singapore and China.
The granting of the status is one of four incentive packages announced by Najib, who is also Finance Minister.