Malaysia: Leveraging A Strategic Location

Located at the center of Southeast Asia, with 35.9 million citizens and forecast average growth of 5% in 2025, Malaysia is expanding its profile as an investment hub. According to the Malaysian Investment Development Authority (MIDI), the multi-state federal monarchy recorded RM378.5 billion (about US$88.2 billion) in approved investments last year, the highest in the nation’s history, and marked 14.9% year-on-year growth in investment. Those numbers reflect in part the increasingly tense relations between mainland China, the regional behemoth, and the US, but also Malaysia’s common-law heritage, educated, English-speaking workforce, and significantly lower costs compared with its smaller neighbor, Singapore. “Malaysia is rich in natural resources and boasts sophisticated infrastructure and advanced digital networks,” notes Dato’ Anusha Santhirasthipam, founder of Akshiya Global Ventures. “Unlike [Singapore], “we have prime land available for development. We also boast a vibrant and dynamic corporate sector and a highly skilled and technologically excellent pool of human resources.”

Tech giants including Microsoft and Alphabet (Google) have established a significant presence in peninsular Malaysia, leveraging a skilled workforce and its strategic location. BMW and Toyota, too, have expanded production facilities, recognizing Malaysia’s growing consumer market and direct access to the 10-nation, 660 million-strong ASEAN market.

Along with a stable government and a track record of business-friendly policies, Malaysia also has built an attractive assortment of tax incentives and benefits for family offices, foreign investors, and expatriates, Santhirasthipam says.

Robust Growth Expectations

Despite the Washington-triggered global trade upheaval, officials are holding to a strong outlook for this year.

Speaking recently in Kuala Lumpur, Abdul Rasheed Ghaffour, governor of the Central Bank of Malaysia, reaffirmed the bank’s 2025 growth forecast of 4.5% to 5.5%.

“Despite mounting risks from a potential global trade war, escalating geopolitical tensions and rising protectionism,” he said, “sustained domestic demand— driven by robust investment activity from multi-year projects—will be the key growth driver while a strong labor market and income-boosting policies continue to support household spending.”

While heightened global uncertainties—particularly the resurgence of protectionist policies—could pose risks to the broader economic outlook, some 6,700 projects across key sectors will create more than 207,000 new jobs this year, Ghaffour forecast, “reinforcing Malaysia’s position as a premier investment destination.”

Foreign investor confidence in Malaysia remains strong. As of last month, domestic investment accounts for 55% of total investment (RM208.1 billion) and foreign investment the remaining 45% (RM170.4 billion).

Five key partners lead the way: the US (RM32.8 billion), Germany (RM32.2 billion), China (RM28.2 billion), Singapore (RM27.3 billion), and Hong Kong (RM7.4 billion).

Climate For Digital Startups

JH Growth Partners, a marketing and sales consultant, has established a strong presence in the region, with business operations in both Singapore and Malaysia.

“Our business in Malaysia is centered on digital products, specifically in programmatic advertising, alongside a suite of broader digital marketing services,” says Daniël Heerkens, managing partner. “We recognized a gap in the market— we went for it.”

Several factors make Malaysia an attractive proposition, Heerkins argues: first, its proximity to Singapore. “You can be in Kuala Lumpur from Singapore with a mere 45-minute flight or a comfortable five-hour drive. This facilitates easy management and movement of personnel.”

Second, costs are significantly lower in Malaysia: typically, around 50% less than in Singapore. This provides a substantial advantage when establishing operations or scaling a business.

Third, English is widely spoken, making communication and business transactions relatively seamless. The cultural similarities with Singapore also contribute to a smoother transition for expatriates and businesses.

“Finally,” he notes, “we found that Malaysian clients were increasingly seeking service providers with international experience beyond Malaysia. With our blend of European and Asia-Pacific expertise, we are well-positioned to offer both competitive pricing and in-depth knowledge.”

An additional boost came from the Malaysia Digital Economy Corporation (MDEC), the government agency that encourages and promotes the nation’s tech sector.

“MDEC proved invaluable, assisting us with the online application process,” Heerkens says. “We successfully secured tax-free status for five years, which was a significant boost. Furthermore, MDEC facilitated easy visa approvals for our company’s specialists and we were able to establish a 100% foreign-owned company with a relatively low paid-up capital requirement of only US$50,000.”