Clearing the confusion: Forest City’s incentives are not a shortcut to long-term residency or easy work permits.
Why a RM50k company isn’t enough — and why trading, import–export, and consultancy businesses won’t qualify.
For the past year, Forest City in Johor has been heavily marketed as an appealing “Residency Lite” option for foreigners—particularly from Singapore, Japan, and South Korea. The message circulating on TikTok, WeChat, and YouTube is simple and seductive: set up a Malaysian company with only RM50,000 in paid-up capital, get a management role, apply for a work permit, stay long term.
Unfortunately, this narrative is deeply incomplete and, in many cases, dangerously misleading.
This briefing explains the actual legal, regulatory, and practical constraints behind the Forest City Special Financial Zone, the company-setup requirements, and the real difficulty of securing work authorization for ordinary businesses like trading, consultancy, or import–export. At Azean Ventures, we hope to help ordinary families avoid false expectations and costly mistakes.
1. Is the Forest City Free Trade Zone a Pathway to Residency in Malaysia?
Short answer: No — not on its own.
The Forest City Special Financial Zone (FCSFZ) is positioned as a tax and digital-economy incentive zone, not an immigration program. The Forest City “Special Financial Zone” Is Not a Residency Shortcut.
There is heavy misunderstanding around Forest City’s incentives.
Forest City offers:
preferential tax incentives for certain qualifying industries
support for high-value sectors like fintech, wealth management, digital services
potential fast-track processing for approved sectors only
What Forest City does not offer:
guaranteed work permits
automatic long-term stay for company owners
permission for low-barrier businesses (trading, consulting, import/export)
immigration exemptions
The Special Financial Zone is designed to attract high-value companies, not to provide a “shortcut residency” for families seeking relocation at minimal cost.
Think of FCSFZ like a tax incentive + business-operations hub, not a “Golden Visa.”
2. Qualifying Activities (from MDEC Official Guidelines)
To operate in the FCSFZ, a company must be doing one or more of the following (summarized):
i. High-Value Digital & Tech Activities
AI development & deployment
Cloud, big data, analytics
Software engineering, automation
Robotics, embedded systems
Cybersecurity
Digital trade platforms
ii. High-Value Manufacturing & R&D
iii. Global Business Services
Regional HQ
Shared services
Digital finance
Digital trade operations
iv. Talent / Training / Knowledge Services
v. Finance-Related Digital Activities
These are not retail, not small family businesses, not property holding, not normal commercial trading.
The zone is designed for technology-first or tech-enabled regional businesses.
What FCSFZ actually offers:
A tax-incentivized base for tech businesses.
A regional ops hub targeted at Singapore overflow and Johor-Singapore integration.
A digital-first ecosystem with reduced corporate tax for qualifying digital income.
A way for foreign founders to apply for employment passes, not residency per se.
3. The RM50,000 Capital Requirement Is Only A Small Piece of the Puzzle.
The “RM50k company” idea comes from the minimum paid-up capital requirement for foreign-controlled companies seeking certain work permits.
But many agents misrepresent this as if:
RM50,000 automatically qualifies you for a work permit
Any basic business activity is sufficient
The Forest City Special Financial Zone creates instant advantages
None of these are true.
“RM50,000 minimum paid-up” refers ONLY to:
✔️ general incorporation
✔️ non-incentive companies
✔️ companies hiring expats under EP II / III
It does not refer to the FCSFZ incentive.
Bottom Line
✔️ RM50,000 = Minimum capital to incorporate a company.
✔️ RM1,000,000 = Required to qualify for Forest City FCSFZ Family-Owned Business.
✔️ RM2–3 million = Strongly recommended by many advisors to demonstrate substance.
4. Family-Owned Business Category — Minimum Malaysian Hiring Requirement.
This is frequently overlooked or misunderstood by people who only read the main FCSFZ slide decks.
For the Family-Owned Business (FOB) category under the Forest City Special Financial Zone:
✔️ The company MUST hire at least 2 Malaysians.
✔️ Each must earn a minimum salary of RM10,000 per month.
This is a special requirement for FOB entities because the incentive’s purpose is:
to encourage high-value, long-term Malaysian talent creation.
to anchor real economic activity (not paper structures).
to ensure local employment participation in “family office” or “family investment” operations.
This requirement is NOT in the general digital economy categories and applies specifically to Family-Owned Businesses.
It is one of the most expensive hiring obligations in the entire FCSFZ framework.
👉 This requirement is real and strictly enforced.
Therefore the ongoing costs would amount to (estimate)
RM240,000/year minimum just for the two required Malaysian staff.
Office rental RM25,000–50,000 per year.
Corporate compliance RM8,000–15,000.
Total: ≈ RM300,000 to RM400,000 per year
➡️ The FOB route is definitely not a cheap way to obtain residency.
5. Many Applicants Are Shocked by the Real Regulations.
Foreign hopefuls often discover, only after spending thousands with “agents,” that:
A. Malaysia does not issue work permits just to business owners.
A company director or shareholder is not automatically eligible for a work permit. It may be considered if the role is critical to company operations.
Simply being the owner is not a justification.
B. Immigration disallows generic businesses for work-permit purposes.
Please understand that Forest City is positioned as a high tech hub. Examples of high-risk, frequently rejected business types:
Import–export trading
General trading
“Business consultancy” without sector specialization – preferably in the tech sector.
Generic marketing or management advisory.
Real estate “management” companies with no assets.
Why? Because these fields are: over-saturated, easy for locals to perform and high-risk for abuse by foreigners seeking residency.
Malaysia is not unique; Singapore, Japan, and Korea enforce similar standards.
6. The Most Common Misunderstandings (And Clarifications) Of Forest City.
Misunderstanding 1: “My Malaysian company automatically lets me live there.”
Incorrect. Company ownership is not an immigration category.
Misunderstanding 2: “RM50,000.00 capital means my work permit is assured.”
Incorrect. Capital is necessary but RM50,000.00 not sufficient.
Misunderstanding 3: “I can just choose any business activity.”
No. Many business activities are automatically flagged as ineligible.
Misunderstanding 4: “Forest City allows me to bypass standard immigration rules.”
Completely false. Immigration laws apply nationwide.
Misunderstanding 5: “Agents told me that being a Director is enough.”
Being a Director does not create a legal basis for a work visa.
7. Final Reality Check.
Malaysia is welcoming. Forest City is promising. But Malaysia does not issue work permits casually, and the RM50,000 minimum capital is not a golden ticket.
For foreigners who seek residency in Malaysia, it is important to distinguish marketing fantasy from legal reality. Call Azean Ventures for the options available to you.
