Firms move operations from Singapore to Malaysia
An overview of bumper-to-bumper traffic as vehicles are seen crossing into Singapore, a day before Malaysia closes its borders at the crossing bordering Malaysia’s southern state of Johor Bahru and Singapore on March 17, 2020.
Suheymi Abdullah | Getty Images
A large number of companies have shifted operations from Singapore to Malaysia in recent months, reflecting a broader trend of global mobility where companies are seeking jurisdictions with lower costs, tax incentives and access to larger markets.
clothing giant H&M In May, it announced that it would move its Southeast Asia headquarters to another location. Singapore to Kuala LumpurIt affects 78 positions. Meanwhile Heineken said In March, Asia Pacific Breweries announced that it would move Singapore’s large-scale production to regional breweries in Malaysia and Vietnam.
“These moves indicate significant and clear momentum,” said Alwyn Lim, associate professor of sociology at Singapore Management University. “Since early 2026, we have witnessed a visible wave of such companies moving their operations to Malaysia… This is more pronounced than in 2025 due to the alignment of policy signals and cost pressures,” Lim told CNBC via email. he said.
Lim said firms were “operating on significant cost arbitrage on rents, wages and operations.”
Companies moving some operations from Singapore to Malaysia are part of a larger global trend that is redirecting manufacturing and supply chain networks, Lim said.
“This is primarily a response to crisis events such as the COVID-19 pandemic, as well as recent trade and geopolitical tensions,” he said. “Companies are splitting the work for lower costs, safety and speed.”
bread maker Gardenya laid off 141 people According to a statement made on May 20, it announced that it would shift bakery production in Singapore to Malaysia. media release. “This move is part of Gardenia’s ongoing efforts to improve operational efficiency and maintain competitiveness in an increasingly challenging global environment,” he said.
Yeo’s, a local beverage company said in march will lay off 25 employees in Singapore, citing efforts to consolidate can production in Malaysia. It was stated that Singapore will continue to serve as the headquarters. expression.
Efforts like this Johor-Singapore Special Economic Zoneor JS-SEZ, aims to strengthen trade between the city-state and Malaysia. It may even accelerate this trend because movement back and forth is expected to become even easier – currently moving between the two countries it may take hours during crowded periods.
Randstad Singapore’s country manager, David Blasco, said companies were shifting some of their operations rather than abandoning Singapore altogether, as many continue to maintain regional headquarters, innovation hubs and higher-value functions in the city-state. It remains “highly attractive” for research and development, strategic decision-making and senior talent, he added in an email to CNBC.
“In contrast, Malaysia offers significantly lower overheads, attractive tax incentives, and industrial land space companies need to scale,” Blasco said. he said.
‘Regional diversity’
ManpowerGroup Singapore’s country manager Linda Teo described the moves as “regional diversification rather than mass relocation”.
“Most companies are not choosing between Singapore and Malaysia, but are using both markets in complementary ways as part of increasingly resilient and sustainable operating models,” Teo told CNBC via email. he said.
H&M and Heineken reiterated that Singapore remains important. H&M will continue to have an office in the city-state, a spokesperson told CNBC. “We will continue to maintain our retail presence as a reflection of our long-term commitment,” he said via email.
Heineken said The move “will continue and deepen Singapore’s role as a base for regional business operations, logistics, innovation and GenAI-enabled capabilities,” it said in an online statement.
Meanwhile, the upcoming JS-SEZ will focus on how companies allocate their resources between Singapore and Malaysia.
According to Enterprise Singapore, the zone, which spans 3,500 square kilometres, is expected to facilitate investments in 11 sectors, including business services, digital economy and education. “As global competition for trade, investments and talent intensifies, JS-SEZ marks an important milestone in bilateral economic cooperation,” the website said.
In January 2025, Malaysian Investment Development Authority Detailed incentives such as low tax rates of up to 5% for eligible sectors under JS-SEZ.
While JS-SEZ could mean companies in Singapore “get upside” from Malaysia’s growth, it could also mean more companies exiting Singapore to enter Malaysia’s significantly larger domestic market, according to Lim.
“What will be interesting to observe is whether there will be a complete exit (complete relocation of companies) or ‘twinning’ (where companies maintain higher-level functions in Singapore and move manufacturing and more core operations to Malaysia),” Lim said.
