A general view of the bumper to bumper traffic as vehicles are seen crossing into Singapore a day ahead before Malaysia closes its borders at the causeway bordering Malaysia’s southern state of Johor Bahru and Singapore on March 17, 2020 in Singapore.<\/p>\n
Suhaimi Abdullah | Getty Images<\/p>\n
A raft of companies has been shifting operations to Malaysia from Singapore in recent months, illustrating a broader trend of global mobility that has firms seeking jurisdictions with lower costs, tax incentives and access to larger markets.<\/p>\n
Apparel giant H&M<\/a> announced in May that it would relocate its Southeast Asian headquarters from Singapore to Kuala Lumpur<\/a>, affecting 78 positions. Meanwhile Heineken said<\/a> in March that it would move large-scale production for its Asia Pacific Breweries Singapore to\u00a0regional breweries in Malaysia and Vietnam.<\/p>\n “These moves are significant and mark a clear acceleration,” said Alwyn Lim, associate professor of sociology at Singapore Management University. “Since early 2026 we’ve seen a visible wave of such companies moving operations to Malaysia … This is more pronounced than 2025 because of an alignment of policy signals and cost pressures,” Lim told CNBC by email.<\/p>\n Lim said the firms were “acting on substantial cost arbitrage on rents, wages, and operations.”<\/p>\n Companies moving some operations from Singapore to Malaysia is part of a larger global trend of firms reorienting their manufacturing and supply chain networks, Lim noted. <\/p>\n “This is primarily a response to crisis events such as the COVID-19 pandemic as well as recent trade and geopolitical tensions,” he said. “Corporations are splitting things up for lower costs, safety, and speed.” <\/p>\n Bread maker Gardenia cut 141 jobs<\/a> in Singapore as it said it would shift its bakery production to Malaysia, according to a May 20 <\/strong>media release<\/a>. “The move is part of Gardenia’s ongoing efforts to enhance operational efficiency and maintain competitiveness amid an increasingly challenging global environment,” it said. Yeo’s, a local beverage company, <\/strong>said in March <\/strong>it would lay off 25 employees in Singapore, citing efforts to consolidate the manufacturing of cans to Malaysia. Singapore will continue to serve as its headquarters, it said in a statement.<\/a><\/p>\n Efforts such as the Johor-Singapore Special Economic Zone<\/a>, or JS-SEZ, aim to strengthen business between the city-state and Malaysia. That may even accelerate the trend because moving back and forth is expected to get easier \u2014 currently transit between the two countries can take hours<\/a> during crowded periods.<\/p>\n Firms are moving some of their operations rather than leaving Singapore entirely, as many continue to maintain regional headquarters, innovation centers and higher value functions in the city-state, said David Blasco, country director of Randstad Singapore. It remains “highly attractive” for research and development, strategic decision-making and senior talent, he added in an email to CNBC. <\/p>\n “In contrast, Malaysia offers significantly lower overheads, attractive tax incentives, and the industrial land space companies need to scale,” Blasco said.<\/p>\n ‘Regional diversification’<\/p>\n Linda Teo, ManpowerGroup Singapore’s country manager described the moves as “regional diversification rather than mass relocation.” <\/p>\n “Most companies are not choosing between Singapore and Malaysia, but are increasingly using both markets in complementary ways as part of more resilient and sustainable operating models,” Teo told CNBC via email.<\/p>\n H&M and Heineken reiterated that Singapore remains important. H&M will continue to have an office located in the city-state, a spokesperson told CNBC. “We will continue to maintain our retail presence reflecting our long\u2011term commitment,” she said by email. <\/p>\n Heineken said<\/a> its move will “maintain\u00a0and deepen\u00a0Singapore’s role as a base for regional commercial operations,\u00a0logistics,\u00a0innovation\u00a0and GenAI-enabled\u00a0capabilities,” in an online statement. <\/p>\n Meanwhile, the upcoming JS-SEZ will focus on how companies allocate their resources between Singapore and Malaysia. <\/p>\n The zone, which spans over 3,500 square kilometers, is expected to facilitate investments across 11 sectors including business services, the digital economy and education,\u00a0according to Enterprise Singapore. “As global competition for trade, investments and talent intensifies, the JS-SEZ marks a significant milestone in bilateral economic cooperation,” it said on its website. <\/p>\n