The two neighbours will work towards enhancing the cross-border flows of goods and people, as well as strengthen the business eco-system within the SEZ to support investments, according to Malaysia's economy ministry and Singapore's trade and industry ministry.

The signing of the deal was witnessed by Malaysia's Prime Minister Anwar Ibrahim and his Singaporean counterpart Lee Hsien Loong at a ceremony in Johor.

Singapore was Johor's second-largest foreign investor from January to June 2022, and contributed to around 70 per

cent of Johor's total foreign direct investment in the manufacturing sector, the joint statement said.

Earlier on Thursday, Anwar and Lee also witnessed the marking of a milestone in the construction of a 4-kilometre (2.49 miles) light rail link between state capital Johor Bahru and Singapore.

(Reporting by Rozanna Latiff; Editing by Kanupriya Kapoor)