Economists say benefits will snowball in the long run, while a business group advises SMEs to ready themselves for higher expectations and stricter business requirements.
Economists and business leaders said that with smoother cross-border travel along the 4km link, there will be new opportunities for investors, while workers, students, patients and tourists can expect better services.
Carmelo Ferlito, CEO of the think tank Center for Market Education, said the impact will be immediate for businesses in the services sector, such as healthcare, F&B, and retail given that they respond quickly when commuting is made easier.
For instance, he said, Johor’s healthcare sector could appeal to those based in Singapore seeking health screenings, specialist treatment and follow-up appointments, especially if local providers offer a strong price-quality ratio.
Ferlito said easier cross-border travel could also support Johor’s hospitality and tourism sectors, although the first impact may be more day trips rather than overnight stays.
“Education can benefit too, especially international schools, colleges and universities. But this is more of a medium-term benefit because family and student decisions take longer,” he told FMT.
“It will depend on quality, accreditation, safety, student transport and whether Johor can offer a convincing cost advantage without compromising standards,” he added.
The RTS Link, developed by MRT Corp subsidiary Malaysia Rapid Transit System Sdn Bhd, will connect Bukit Chagar in Johor Bahru with Woodlands North in Singapore. It is expected to handle 30% to 40% of cross-border movements.
However, Ferlito cautioned that infrastructure alone would not guarantee Johor’s economic growth.
He said the state must improve last-mile connectivity, immigration efficiency, service quality, licensing, and business friendliness to “make it easy for entrepreneurs to turn foot traffic into real demand”.
Small and Medium Enterprises Association (Samenta) chairman William Ng said transport providers could benefit from the last-mile gap by shuttling visitors from RTS stations to other parts of Johor.
On July 2, transport minister Loke Siew Fook said the federal government was ready to expedite Johor’s elevated autonomous rapid transit (e-ART) project and fund part of its cost to improve last-mile connectivity and ease congestion in Johor Bahru city centre.
Long-term sectoral impact
Universiti Kebangsaan Malaysia economist Mustazar Mansur said the RTS Link would act as a catalyst for the Johor-Singapore Special Economic Zone (JS-SEZ).
“Look at it as part of a broader federal government initiative to make Johor a more appealing investment destination,” he said.
In the longer term, he said, easier commute would expand investments, attract skilled workers and expatriates, and boost business around the JS-SEZ.
Mustazar said the property sector would be a key long-term beneficiary as demand grows for residential and commercial space linked to new investment activities.
He said this would then spill over into other service sectors such as personal care, home services, transport, finance and F&B.
Like Kertih in Terengganu, Mustazar said, the long-term spillover would be driven by jobs created from investment, which would increase income and purchasing power.
“This is the case with Kerteh, where oil and gas activities have created jobs and, along with that, raised income. This then enhanced purchasing power, thereby lifting surrounding businesses, especially F&B,” he said.
Mustazar said the RTS Link, as part of broader government initiatives, would help Johor move beyond a domestic-demand economic model and build a service economy supported by both local consumers and cross-border demand from Singapore.
That investment momentum is already visible. In 2025, Johor recorded RM110 billion in approved investments, making it Malaysia’s top investment destination, with the JS-SEZ accounting for 85.5% of investments in the state, according to the Malaysian Investment Development Authority (Mida).
SME readiness critical
Ng said SMEs, particularly those within the RTS Link transit catchment area, are looking forward to the opportunities that could come with the cross-border rail service.
He said local SMEs could complement multinationals that have invested in the JS-SEZ by integrating themselves into supply chains in manufacturing, distribution and engineering.
However, Ng said, higher investment and passenger traffic would not automatically benefit every business in Johor, as SMEs must be ready to meet higher standards, stricter requirements, and changing consumer behaviour.
“In manufacturing, local SMEs must aggressively upgrade their digital capabilities, operational efficiency and ESG compliance to qualify as vendors.
“Multinationals maintain strict global standards, so while massive opportunities will arise, the barrier to entry will also rise,” he told FMT.
Ng said SMEs in the services sector must actively capture the attention of busy commuters through clear signage, efficient “grab-and-go” concepts and geo-targeted digital marketing.
“They need to entice travellers before they even board the train in Singapore,” he said.
He said businesses must provide seamless cross-border payment options, including Singapore e-wallets, credit cards and universal QR codes, while training staff to handle high-volumes of transactions during peak periods efficiently.
Ng said operators should also align their business hours with train schedules so they do not miss early morning or late-night commuter traffic.
He urged authorities to work closely with business groups and agencies such as Mida to help SMEs upskill, digitalise and plug directly into the high-value supply chains of incoming multinational companies. - FMT
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