1. Start with the brief, not the site
Most failed relocations go wrong before the first viewing, because the requirement was never written down. Eight questions settle it:
- Why Johor, and why now: expansion, relocation, cost, capacity or a customer pulling you in?
- What will happen on site, and is any process hazardous? This sets light, medium or heavy industry.
- What specification: land and built-up, power, eave height, floor loading, loading bays, office share, room to expand?
- Where must you be near: Singapore, a port, the airport, customers, suppliers, a labour pool?
- When must you be operating, and when is the decision made?
- Lease or buy, which entity will hold it, and what budget?
- How many people, with what skills, and who relocates from Singapore?
- Who decides, who recommends, and which approvals and incentives are you targeting?
2. Lease or buy
| Lease | Buy | |
|---|---|---|
| Capital required | Deposits, fit-out and reinstatement | Price plus about 5% to 10% in costs, more for foreign interests |
| Speed | Faster; no state consent for most leases | Slower; state consent for foreign interests adds time |
| Flexibility | Exit at lease end; renewal risk | Control over the asset; exit depends on resale |
| Suits | First phase, uncertain volumes, testing the market | Long-term operations, heavy fit-out, custom specification |
Many companies lease for the first phase and buy or build once volumes are proven. Leases to foreign interests over longer terms can need registration and consent; check with your lawyer before signing.
3. Rules for foreign buyers
- State consent. A foreign interest needs Johor state consent to acquire land, including industrial land. A company counts as foreign where non-citizens or foreign companies hold 50% or more of its voting shares (National Land Code s433A, as summarised in Bar Council Circular 444/2024).
- Minimum price. RM 1 million for commercial and industrial property. Agricultural land: RM 1 million and more than 15 acres.
- State approval fee (from 1 July 2025). 4% of the price for industrial property, 3% for commercial (minimum RM 30,000), plus a RM 2,000 application fee (PTG Johor Circular 3/2025).
- Not available. Malay Reserve land and lots allocated to Bumiputera buyers.
- Stamp duty. The standard scale is 1% to 4% of the price. The 8% rate for foreign buyers introduced in 2026 applies to residential property; confirm the rate for your transaction with your lawyer.
- Exit. Companies pay real property gains tax of 30% on gains within three years, falling to 10% from the sixth year.
Sources: Bar Council Circular 444/2024 (23 Dec 2024); PTG Johor Circular 3/2025; Skrine and PwC Malaysian Tax Booklet 2025/26; LHDN.
4. Ten specifications that decide a site
| Specification | Why it matters |
|---|---|
| Power supply (amps or kVA) | An upgrade with TNB can take months and money. Confirm capacity before you shortlist. |
| Eave height | Racking and cranes are limited by the lowest point of the roof, not the ridge. |
| Floor loading (kN/m²) | Heavy machinery and high racking need it confirmed on drawings. |
| Land use and express condition | Light, medium or heavy industry on the title decides what you may legally run. |
| Title and tenure | Freehold or leasehold, years remaining, renewal premium, final or qualified title. |
| CCC and approved plans | Unapproved extensions can block your licence and your bank. |
| Fire certificate and system | Bomba approval and sprinkler type, especially for high-bay storage. |
| Access and loading | Container-truck access, road width, loading bays and dock levellers. |
| Land against built-up | Room to expand, open yard and lorry parking. |
| Restrictions and encumbrances | State consent to transfer, lease or charge; existing charges and caveats. |
5. The full cost: an illustration
The price is not the cost. Below is an illustrative purchase of a RM 5 million factory, comparing a Malaysian-owned company with a company that counts as a foreign interest.
| Cost item | Basis | Malaysian-owned (RM) | Foreign interest (RM) |
|---|---|---|---|
| Stamp duty on transfer | Scale: 1% / 2% / 3% / 4% | 184,000 | 184,000* |
| State approval fee | 4% for industrial | – | 200,000 |
| State consent application | Fixed fee | – | 2,000 |
| Legal fee | Scale 1.25% / 1%, plus 8% service tax | 55,350 | 55,350 |
| Searches and disbursements | Estimate | 3,000 | 3,000 |
| Total before financing | 242,350 (4.8%) | 444,350 (8.9%) |
* Assumes the standard scale applies; confirm with your lawyer. Excludes land office registration fees, loan costs, power upgrades, fit-out, racking and licences. Illustrative only.
For a lease, budget for deposits, service tax on rent (6% from 1 January 2026 where the landlord is registered), stamp duty and legal fees on the tenancy, fit-out, and reinstatement at the end of the lease.
6. People and permits
- Employment Pass minimum monthly salaries from 1 June 2026: RM 20,000 (Category I), RM 10,000 (Category II), RM 5,000 (Category III; RM 7,000 in manufacturing).
- EPF contributions for foreign employees have been mandatory since October 2025 wages: 2% from the employer and 2% from the employee.
- Licences. A manufacturing licence for non-sensitive industries can be fast-tracked to seven working days in the JS-SEZ. Local council business licences, Bomba and environmental approvals follow your activity.
Sources: Baker McKenzie, 26 Jan 2026 and EY, Jun 2026 (Employment Pass); EPF guidance reported 2025; MITI, 14 Oct 2025.
7. Six expensive mistakes
- Signing before checking the express condition. A light-industry title will not permit a medium-industry process.
- Assuming the extension is approved. Many factories have extensions not on the approved plans.
- Discovering the power gap after signing. Upgrades can take longer than the fit-out.
- Ignoring the lease clock. A leasehold title with 20 years left affects financing and resale.
- Budgeting on price alone. State fees and stamp duty can add 9% or more for a foreign interest.
- Leaving consent too late. State consent and its timing belong in the project plan from day one.
Get the one-page checklist
Thirty checks before you sign, with who verifies each one, or share your brief and I will apply them to real sites.
This guide summarises public information as at 4 October 2026 for discussion only. It is not legal, tax, valuation or investment advice. Ronald Mak | Johor Realtor (REN 80365), PropNex Realty Sdn. Bhd.