Some M'sia tour agencies going bankrupt after vehicles used for cross-border services not released by S'pore LTA

Vehicles impounded after they have been used for illegal cross-border transport services will not be automatically released upon payment of fines by the convicted drivers, the Land Transport Authority (LTA) said in a Sep. 4 response to media.

Separate proceedings will be held to determine if the vehicle is to be forfeited and that there is no guarantee of its release, LTA said.

LTA has investigated more than 100 foreign-registered vehicles that provided such services in 2025.

Most are still impounded as investigations and court proceedings are ongoing, and may include those registered to Malaysian tour companies, LTA added.

Malaysia tour agencies facing bankruptcy

This issue has made headlines after The Star reported earlier on Aug. 24 that about 400 tour agencies in Malaysia were facing bankruptcy due to their luxury multi-purpose vehicles (MPVs) having been seized in Singapore.

The Malaysia MPVs impounded cost between RM250,000 (S$76,292) and RM500,000 (S$152,585).

The vehicles were reportedly still impounded even after the fines were paid.

More than 30 representatives from Malaysia travel agencies banded together to urge the Malaysia Transport Ministry to help them resolve the matter as a result.

The report hinted at the demand for such services as it mentioned that there were about 3,000 MPVs operating cross-border services, which were with 76 travel agencies in Johor registered with its Tourism, Arts and Culture Ministry.

Vehicles not involved in illegal services will be released

LTA said impounded vehicles found not involved in providing illegal point-to-point services will be released to their owners promptly.

It added that there are existing schemes that allow Malaysia tour companies to license tour buses to transport tourists in and out of Singapore.

VEP applications denied by Singapore authorities?

However, there also appears to be a conflating of other issues and misunderstanding about the purpose of Singapore-issued permits.

One gripe raised by the Malaysia tour agencies was that the Singapore authorities have denied their Vehicle Entry Permit (VEP) applications for the past two years, Malay Mail reported earlier on Aug. 22.

However, LTA clarified that the Singapore-issued VEP is not a licensing scheme for taxi services or other commercial purposes, including transport of tourists.

A VEP only allows foreign-registered cars and motorcycles to enter Singapore for private purposes.

"VEP applications by individuals or commercial entities intending to provide hire-and-reward, e-hailing, or passenger transport services are rejected," LTA said.

"Even if they have a VEP, it is illegal for Malaysia-registered cars, including private hire cars, to provide cross-border passenger transport into and within Singapore," the Singapore authority added.

The four premium MPVs that have allegedly had their VEP applications rejected were Toyota Alphard, Toyota Vellfire, Hyundai Staria and Hyundai Starex, it was reported.

Tour agencies affected claimed this has led to up to 50 per cent loss of income.

Current licensing scheme available

In response, a tour agency operator proposed a fare coordination for those plying the roads for a living in Singapore and Malaysia, with authorities from both sides urged to hold discussions.

LTA said there are existing schemes that allow Malaysia tour companies to license tour buses to transport tourists in and out of Singapore.

These include the Intercity Express Bus Services that have fixed stopping points in Singapore, and tour buses for sightseeing purposes.

All Malaysia-registered buses must have an Asean Public Service Vehicle Permit (PSVP) to operate across borders, LTA said.

For Malaysia-registered taxis involved in cross-border services, they must have valid public service vehicle licences and PSVPs, which are issued by LTA.

Background

Between 2022 and July 2025, 136 drivers were caught for providing such services, with their foreign-registered vehicles impounded.

On Aug. 3, LTA said there was no decision made after a meeting between Acting Transport Minister Jeffrey Siow and Johor state’s chief minister, Onn Hafiz Ghazi.

A cross-border ride-hailing service was among several proposals brought up then.

LTA added that there were no plans to fully liberalise cross-border point-to-point transport through ride-hailing services.

Top photos via Professional PHV Drivers Singapore Facebook & The Star