A growing number of Malaysian tour agencies say they are on the brink of bankruptcy after their luxury multi-purpose vehicles (MPVs) were seized in Singapore for allegedly providing illegal cross-border transport services.
The Land Transport Authority (LTA) confirmed that foreign-registered vehicles caught ferrying passengers illegally into Singapore will not be automatically released, even if drivers pay their fines. Instead, separate proceedings will determine whether the vehicles are to be permanently forfeited.
Investigations are ongoing into more than 100 foreign-registered vehicles in 2025, many of them owned by Malaysian operators. Each seized MPV is estimated to be worth between RM250,000 (S$76,000) and RM500,000 (S$152,000), a heavy financial blow to small agencies relying on these premium vehicles.
400 Agencies at Risk of Collapse
The issue gained traction after reports from Malaysia revealed that some 400 tour agencies could face closure due to their vehicles being stuck across the Causeway. Despite fines being settled, many vehicles remain impounded as court cases drag on.
In Johor, representatives from over 30 travel agencies have appealed to their Transport Ministry for urgent intervention. They argue that without their Alphards, Vellfires and Starias, they have lost up to half of their income, with bookings for Singapore-bound tours now drying up.
Demand for such services had been growing steadily, with an estimated 3,000 MPVs previously operating across the Causeway under about 76 licensed Malaysian travel agencies.
LTA Clarifies: VEP Not a Commercial Licence
Some operators blamed Singapore for rejecting their Vehicle Entry Permit (VEP) applications over the last two years. However, LTA clarified that VEPs are only for private purposes, not for taxi-style or hire-and-reward operations.
Even with a valid VEP, Malaysia-registered cars are not allowed to provide cross-border point-to-point transport services. For legitimate operations, only licensed tour buses and approved taxis with Public Service Vehicle Permits (PSVPs) can ferry passengers between the two countries.
Between 2022 and mid-2025, 136 drivers were caught for breaching these rules. Singapore has also ruled out liberalising cross-border ride-hailing services, despite proposals raised during meetings with Johor officials.
Looking Ahead
While bus operators can still apply under existing intercity and sightseeing schemes, MPV-based tour agencies say these do not fit the premium segment of travellers who prefer comfort and privacy.
For now, unless both governments find common ground, the impasse could leave many Malaysian tour operators struggling for survival — with their costly vehicles sitting idle in Singapore impound lots.