Lim Guan Eng (PH-Bagan) said the proposed 40ha zone, located near Penang Port and the upcoming cross-strait LRT line, could become a new growth hub for the mainland, balancing development between Seberang Perai and George Town.
“It is time for Seberang Perai to be chosen so that development can be more balanced for the people living in the semi-urban areas,” he said while debating the Supply (Budget) Bill 2026 in the Dewan Rakyat.
A special financial zone allows for more flexible financial and investment rules to attract banks, fintech firms, fund managers, and other global investors.
Unlike special economic zones, which target manufacturing and exports through tax and customs incentives, SFZs typically focus on finance and tech, offering tax breaks, streamlined regulations, and advanced infrastructure.
For example, the Forest City SFZ and the Labuan International Business and Financial Centre offer incentives like 0% tax for family wealth offices to attract international financial firms.
Lim said Penang’s economy, which relied 95% on manufacturing and services, faced major challenges from US tariff threats on semiconductors and high-tech exports.
He warned that global trade disruptions, price dumping, and shrinking markets could threaten local small and medium-sized industries.
“With Donald Trump’s tariff war and the threat of 100% duties on semiconductors, Penang faces a major challenge to sustain its economic success,” he said.
Lim also touched on the national fiscal policy in his debate, saying that Putrajaya should replace “contingent liabilities” – loans guaranteed by the government but taken by GLCs – with direct borrowing to improve transparency and create more fiscal space for development spending.
He said such liabilities currently totalled RM332.8 billion, or 17.2% of GDP, pushing the country’s total debt exposure to about 82% of GDP.
“If these contingent liabilities are converted into direct government debt, it would create fiscal space for development spending such as research and development, which remains far below the 2.5% GDP target,” he added.