Singapore Restaurateurs Turn to Johor Bahru as Costs and Closures Mount at Home

A Cheaper Base Across the Causeway

More than 3,000 food and beverage establishments closed in Singapore in 2024, followed by nearly 2,000 in the first half of 2025. With rents rising, workers hard to find and foreign hiring restricted, some restaurateurs are looking to Johor Bahru for a way to keep their businesses growing.

Hyderabadi chef Govinda Rajan, owner of Mr Biryani, opened his first Malaysian branch in Johor Bahru about three months ago. By July 21, 2025, he was already planning further expansion, even as his Singapore outlets struggled to stay afloat.

Rajan described what the Malaysian operation meant for his business:

It's a lifeline.

Johor Bahru, often shortened to JB, offers lower rents and wages, proximity to Singapore and access to a growing middle class. Those advantages can give restaurant owners more room to earn a profit and reduce the pressure that comes with running an outlet in Singapore.

Keith Koh has found similar relief elsewhere in Malaysia. After launching a Muslim-friendly version of Lad & Dad in Kuala Lumpur, he reported less burnout and a renewed passion for the business. His experience shows that the search for a more manageable operating base extends beyond the border city.

Malaysia brings its own demands, however. Restaurant owners must understand a different market, obtain the right licences and work permissions, and plan around journeys that can be disrupted by congestion or immigration problems. Lower costs are an attraction, but running an outlet across the border involves much more than finding cheaper premises.

Why Singapore's Restaurant Sums Are Getting Harder

Singapore's food and beverage sector, known for its diversity and innovation, faces several pressures at once. Commercial rents have reached record highs, reducing the money left after a restaurant pays for its premises, ingredients and staff.

Labour shortages make that calculation harder. Strict foreign worker quotas and levies limit recruitment and add to employment costs, while many local workers are reluctant to take service jobs. A quota limits how many foreign workers a business may employ; a levy adds a charge for employing them.

Restaurants can consequently remain short of staff even when they need more people to serve customers. For owners, that means heavier workloads alongside financial pressure. Burnout and closures have become part of the same difficult business environment.

Geoffrey Tai of Temasek Polytechnic notes that more operators are expanding regionally to escape Singapore's high overheads and reach Malaysia's growing consumer base. Overheads are the continuing expenses of keeping a business open, including rent and wages.

Chef and restaurant owner Bjorn Shen, who has expanded to Penang and Bali, reports that profits of 20% to 30% are achievable abroad, compared with just 5% to 7% in Singapore. He also describes a market at home where most new restaurants fail within two years.

Those figures help explain why an owner might seek growth outside Singapore while keeping an existing business there. A restaurant with little money left after expenses has less room to absorb another rent increase, a staffing problem or a period of weaker sales.

What Johor Bahru Offers Restaurateurs

Johor Bahru's main attraction is a lower operating cost base. Rent and wages are substantially lower than in Singapore, although some ingredients can cost more in Malaysia. Owners must therefore weigh the whole business budget, rather than assume every purchase will be cheaper.

The city's growing middle class offers another reason to expand. Restaurateurs can reach Malaysian customers while remaining close to Singapore, giving them access to demand on both sides of the border.

JB already has a lively dining scene, combining local eateries, international chains and a growing number of Singaporean brands. New arrivals enter an existing restaurant market with its own competitors and customer expectations.

The city centre around City Square and Komtar JBCC, together with the heritage district, has concentrations of restaurants, bars and shopping malls. Hotels including DoubleTree by Hilton and Holiday Villa are surrounded by dining options, making those areas attractive to tourists and business owners.

Getting around the city is a practical consideration. Pedestrian access is limited, and most journeys within JB require taxis or ride hailing services. A restaurant's location therefore matters both for the people running it and for diners deciding how to reach it.

A Busy Border Shapes the Working Day

The Johor-Singapore Causeway carries about 300,000 people a day, making it one of the world's busiest land crossings. During peak periods, including public holidays, the number can exceed half a million in a single day.

Many Singaporean restaurateurs and their employees commute between the two cities daily. A journey that varies sharply from day to day can complicate staffing, management visits and the ordinary work of keeping a restaurant open on schedule.

Buses are the most affordable option, but immigration queues and road congestion can stretch the journey to one or two hours each way. Travellers need to account for both the transport journey and the time spent clearing the border.

The train bypasses road congestion and offers a faster alternative. Its usefulness is limited by ticket availability, with seats selling out quickly.

Licensed taxis operating across the border offer greater convenience at a higher price. They still face traffic delays, leaving restaurant owners to choose between cost, availability and journey time rather than a consistently quick commute.

Automated Gates and QR Codes Change Clearance

Malaysia's automated immigration gates are now open to citizens of 63 countries, including Singapore. Eligible travellers can use them to pass through immigration more quickly.

Most travellers must complete the Malaysia Digital Arrival Card, known as MDAC, before arrival, although Singaporeans are exempt. First time users of the automated gates must register at a manual counter before using the gates on later visits.

Singapore is also rolling out passport-free clearance at land and sea checkpoints. From December 2024, travellers can use QR codes generated through the MyICA app for immigration clearance at Tuas and Woodlands.

The QR code system was tested with tens of thousands of participants and is intended to make clearance easier for individuals and groups. For people making repeated business journeys, shorter processing times could ease one part of the commute.

Technology still depends on systems remaining available. In July 2025, a major automated gate failure at the Bangunan Sultan Iskandar Customs, Immigration and Quarantine Complex in JB disrupted travel for more than 380,000 people.

Long queues formed as manual counters struggled to handle the traffic. For businesses dependent on regular crossings, the disruption showed how quickly a technical failure can affect the working day, even after investment in faster clearance.

Work Permissions and Licences Matter

Malaysian immigration enforcement is another concern for restaurant operators. Businesses must meet local licensing requirements and ensure that employees have permission to do the work assigned to them.

In November 2024, Johor authorities detained 85 illegal immigrants during raids on food and beverage establishments. Those detained included a Singaporean man working as a waiter.

The offences included overstaying, misusing visit passes and working without permits. Permission to enter a country and permission to work there involve different requirements, a practical issue for anyone planning to help run an outlet across the border.

Restaurant owners also face Malaysian labour and tax requirements. Understanding these obligations can be complicated for someone familiar mainly with Singapore's business rules, making local knowledge and relationships with local partners valuable.

Personal encounters at immigration can also become serious. A Singaporean writer was detained for seven days after a dispute at a checkpoint, an incident that drew attention to the need to understand and respect local procedures.

Some Singaporeans travelling or working in JB have reported negative encounters with immigration officers. Crime and concerns about security also feature among the risks considered by business owners, although such incidents are not widespread.

Two Economies Competing for Workers

Singapore's restaurants moving into Malaysia are part of a wider pattern of movement across the border. Singapore attracts Malaysian workers with higher wages and better job prospects, while some Singaporean restaurant owners now seek relief from costs in Malaysia.

Malaysia has long faced the loss of skilled people to jobs abroad, often described as brain drain. More than half of the Malaysian diaspora in Singapore have tertiary qualifications, and many are skilled or semi-skilled workers.

Singaporean employers value Malaysian workers for their skills and their willingness to take roles that local workers may avoid. Hiring Malaysians is not always cheaper, however, because levies and administrative expenses add to the cost.

For Singapore's food and beverage businesses, tight foreign worker policies and difficulty attracting local staff contribute to chronic shortages. Owners can find themselves managing an understaffed restaurant while trying to contain rising expenses.

JB offers restaurateurs a labour market where workers are more readily available and employment regulations are less restrictive. Malaysia still enforces its immigration and labour laws, as the restaurant raids demonstrate.

The relationship brings benefits in both directions. Singaporean businesses opening in JB create jobs, transfer skills and contribute to the local economy. Malaysia must also balance the value of investment from abroad with retaining its own talent and enforcing its laws.

Lower Costs Still Require a Local Strategy

Restaurateurs entering JB face different consumer preferences, levels of price sensitivity and competition. A restaurant that succeeds in Singapore must still find a place in the Malaysian market.

Industry insiders warn that some owners underestimate the difficulties of expansion. Lower rent can improve a budget, but it leaves questions about staffing, licensing, customer demand and the day to day management of an outlet in another country.

Local market research helps owners decide how to adapt their menus, prices and service. Building relationships with local partners can also help them understand the business environment and regulatory requirements.

Failed ventures and legal trouble form part of the experience alongside successful openings. Some Singaporeans have struggled to adapt, while others have faced consequences for working without proper permits.

Attempts to bypass immigration controls have brought still more serious outcomes. A man died after falling from a bridge in JB while apparently trying to evade inspection. Two Bangladeshi men were jailed and caned after attempting to swim illegally into Singapore from JB.

For a restaurateur, a workable expansion plan must bring together the financial opportunity and the legal, logistical and cultural demands. Rajan's expansion plans and Koh's renewed enthusiasm illustrate the attraction, while the enforcement cases and transport disruptions show the obligations that come with operating across the border.

The Dates Behind the Shift

The restaurant closures, enforcement actions and changes to border processing have unfolded across several dates. Together, they explain the pressures and opportunities facing operators as of July 21, 2025.

• 2024: More than 3,000 food and beverage establishments closed in Singapore.
• November 2024: Johor authorities detained 85 illegal immigrants in raids on food and beverage businesses, including a Singaporean man working as a waiter.
• December 2024: Singapore began allowing travellers to use MyICA QR codes for clearance at Tuas and Woodlands.
• About three months before July 21, 2025: Govinda Rajan opened Mr Biryani's first Malaysian branch in JB.
• First half of 2025: Nearly 2,000 more food and beverage establishments closed in Singapore.
• July 2025: An automated gate failure at the Bangunan Sultan Iskandar complex disrupted travel for more than 380,000 people.
• End of 2026: The Johor Bahru-Singapore Rapid Transit System Link is expected to carry up to 20,000 passengers an hour.

Restaurant owners making decisions now must operate within today's border arrangements while considering how planned transport improvements could change access later.

Rail Plans Add to the Opportunity

Malaysia is investing in infrastructure and technology to improve movement across the border. The upcoming Johor Bahru-Singapore Rapid Transit System Link is a major part of that effort, with an expected capacity of up to 20,000 passengers an hour by the end of 2026.

Better connections could make visits and working journeys easier for people using both cities. The existing combination of buses, limited train tickets and taxis leaves businesses exposed to variable travel times.

Singaporean restaurateurs continue to look towards JB despite those difficulties. Lower operating costs, a growing consumer market and proximity to home give the city an appeal that extends beyond a single restaurant opening.

Success depends on adapting to Malaysian customers, understanding local rules and maintaining workable business relationships. For diners, the arrival of more Singaporean brands adds to a city already offering local eateries and international chains. For owners, the opportunity is to build a more sustainable business while managing the responsibilities of operating in another country.

Key Points

• Singapore recorded more than 3,000 food and beverage closures in 2024 and nearly 2,000 in the first half of 2025.
• Mr Biryani owner Govinda Rajan is planning further Malaysian expansion after opening in JB about three months ago.
• Lower rents and wages attract operators, although some ingredients cost more in Malaysia.
• Border congestion, transport availability and technical failures can disrupt daily business journeys.
• Malaysian work permissions, licensing, labour and tax requirements remain central to running an outlet legally.
• The planned Rapid Transit System Link is expected to carry up to 20,000 passengers an hour by the end of 2026.
• Restaurateurs must adapt to local customers and competition as well as manage costs.