KUALA LUMPUR: Malaysia said on Wednesday it will seek to finalise plans and sign a full-fledged pact with Singapore to develop a special economic zone (SEZ) between the countries in September.

The neighbours in January agreed to develop the SEZ in Malaysia's southern Johor state, just north of Singapore, aiming to attract investment and free up the movement of goods and people.

Malaysia's Economic Minister Rafizi Ramli said the final pact will be signed ahead of an annual retreat between the leaders of Singapore and Malaysia later this year.

"We are confident that we are able to complete the mobilisation to finalise and sign the agreement in time for the deadline," he told reporters at an investment forum for the SEZ.

Proposals for the Johor-Singapore SEZ include a passport-free immigration clearance system, as well as cooperation on renewable energy and simplifying business approvals.

Johor state officials have put forward plans to build the SEZ in business hub Iskandar Malaysia and the Pengerang district, home to Malaysia's sprawling oil and gas development complex, according to media reports.

Thousands of Malaysians commute everyday to small but wealthy Singapore for work and study, causing frequent traffic congestion on the causeway between the countries, one of the world's busiest land crossings.

Rafizi said the SEZ is expected to become a gateway for both Western and Eastern investors, including firms from China, to Southeast Asia.

"The JS-SEZ will be able to offer the best of both worlds, with investors having access to the sophistication of Singapore and the cost and resource advantages of Johor," he said.