KUALA LUMPUR (Reuters) – Malaysia will create a “special financial zone” in embattled Chinese developer Country Garden’s $100 billion project in the Southeast Asian nation and offer incentives to attract investments, Prime Minister Anwar Ibrahim said.
The massive Forest City project is being build across four reclaimed islands in Malaysia’s Johor state near Singapore, and aims to house 700,000 people by 2035. It will include office towers, malls and schools in addition to residential buildings.
The planned incentives for Forest City come at a time when Country Garden is facing deep financial woes.
Forest City is its largest overseas development, and is a joint venture with Esplanade Danga 88, a private Malaysian company backed by the Johor government and the sultan of Johor, Sultan Ibrahim ibni Almarhum Sultan Iskandar.
New incentives to be offered at Forest City include a special income tax rate of 15% for skilled workers and multiple entry visas, Anwar said in a statement released on Friday.
Country Garden did not immediately respond to a request for comment on the Malaysian government’s plan.
The “special financial zone” – to be implemented in the near future – will lower the cost of doing business in Forest City, state news agency Bernama reported, citing the premier.
Country Garden, China’s largest private developer, earlier this month missed two dollar coupon payments totaling $22.5 million, raising fears that the country’s deepening property debt crisis will hamper the financial sector and a broader economic recovery.
(Reporting by A. Ananthalakshmi, additional reporting by Clare Jim in Hong Kong; Editing by Martin Petty)
