Malaysia and Singapore leaders have signed an agreement to create a special economic zone to attract global investment and ease the cross-border flow of goods and people.

The leaders of Malaysia and Singapore are set to formalize an agreement establishing a special economic zone linking their two nations’ border region, but the prospects for immediate economic benefits may hinge on implementation of a deal that has seen repeated delays since talks began in 2023.

Malaysia and Singapore announced on Tuesday an agreement on a special economic zone in the southern Malaysian state of Johor, aiming to support investment and free up movement of goods and people between the countries.

The Johor-Singapore Special Economic Zone is nearly twice the size of Shenzhen, whose success it is hoping to emulate.

Malaysia unveiled a slew of tax incentives to lure investors to its joint special economic zone with Singapore that seeks to add $26 billion per year to the Malaysian economy by 2030.

Malaysia and Singapore signed the Johor-Singapore Special Economic Zone (JS-SEZ) agreement to boost cooperation and investment between Johor and Singapore, utilizing their proximity for mutual growth,