The leaders of Malaysia and Singapore formalized an agreement establishing a special economic zone linking their two nations’ border region, with the aim of attracting 50 projects in the first five years of its establishment.

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.

Malaysia and Singapore leaders signed an agreement on Tuesday to create a special economic zone to attract global investment and ease the cross-border flow of goods and people. Malaysian Prime Minister Anwar Ibrahim called the Johor-Singapore special economic zone a “unique initiative” that harnesses each other's strengths and deepens linkages in a world that is becoming more polarized.

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.

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