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Invest in Penang: Creating the Silicon Valley of the East

Invest in Penang: Creating the Silicon Valley of the East

The silicon valley of the east


Located at the northwest coast of Peninsular Malaysia, Penang is known as the Pearl of the Orient.


Penang has its own unique competitive advantages, due to its skilled workforce, robust supply chain, top-notch infrastructure and strong state government support, making it a preferred destination for foreign direct investments.


Track Record


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Why You Should Invest in Penang?


Over the years, Penang has emerged as a major industrial and commercial hub in the region, attracting investors from all around the world. The state's strategic location, excellent infrastructure, and business-friendly policies have made it an ideal destination for businesses looking to expand or set up operations in Southeast Asia.


As the state continues to develop and modernise, investing in Penang offers tremendous potential for growth and high returns. In this section, we will explore the key reasons why you should consider investing in Penang and how it could be a lucrative opportunity for your investment portfolio.


Strong Investment Ecosystem


Penang is home to more than 300 multinational companies and more than 3,000 SMEs. There is a diverse range of companies in various clusters with a solid network of SMEs to support these multinational companies. Penang is known for its semiconductor, E&E and medical devices sectors that are fronting the growth of the industrial economy. The Penang government has more than 60 global companies setting their service hub here supporting their worldwide operations. Besides, the government is very supportive in accelerating startup development with the state-back development fund.


Improving Competitive Advantage


With more than 50 years of industrial experience and business intelligence, Penang development is accelerated by the 8 Samurai of Penang, namely Intel, Bosch, Osram, HP, AMD, Clarion, Renesas and Fairchild. Penang has obtained RM47 billion in Foreign Direct Investment (FDI), which represents 15% of Malaysia total investment inflows. Penang has attracted FDI mainly from the US, Europe and Japan for the past decade. Besides, Penang is ranked as one of the cheapest utility rates in Asia. Penang is a strong advocate for IP protection and active IP creation. Penang and Malaysia are part of many treaties such as World Intellectual Property Organization 1967, Paris Convention for the Protection of Industrial Property 1883 and Patent Cooperation Treaty 1970.


Highly Skilled and Sustainable Talents


Penang has a pool of multilingual human talent that are proficient in English, Chinese, Japanese and Korean. Penang has a 98.3% literacy rate. There are more than 40 learning institutions across various education and focus areas. Besides, there are 4 universities, more than 20 university colleges and 5 industrial training institutes in Penang to up-skill the local talents.


Well-connected infrastructure


Penang island is connected to Peninsular Malaysia via 2 bridges, including Penang bridge and Sultan Abdul Halim Muadzam Shah Bridge. There is also a double track railway at Butterworth connecting Southern Thailand and Gemas. Besides, Penang has Malaysia's third largest airport that can cater 12 million passengers every year and the second largest cargo hub that has more than 150,000 tons of annual cargo handling capacity. Penang also has many state-of-the-art technology parks, namely Bayan Lepas Industrial Park, Prai Industrial Park,  Batu Kawan Industrial Park and Penang Science Park. Batu Kawan Industrial Park is home to major technology companies such as Broadcom, Vitrox, Inari,UWC, Western Digital,HP, Honda etc. 


Liveable City


Penang prides itself as one of the safest cities in Malaysia as the city is well equipped with CCTV with facial recognition. Travelers love Penang for its diversified culture, food variety and vibrant lifestyle. Georgetown was awarded the UNESCO world heritage site status in 2008. Besides, Penang is a strong advocate of green initiatives with its Penang Green Agenda.


Getting Started with Investing in Penang


As a foreign investor considering the lucrative landscape of Penang's industrial real estate market, it's important to grasp the essential steps and key factors involved in your investment journey. Below is a comprehensive outline of the steps involved:


  1. Legal Structure and Approval: Firstly, determine the legal framework that suits your investment strategy—options include a wholly foreign-owned company, a joint venture, or a representative office. Subsequently, secure approval from the Malaysian Investment Development Authority (MIDA) for your proposed investment. Their endorsement is crucial to proceed.
  2. Meet Investment Criteria: Align your investment with MIDA's stipulated criteria for foreign investments. These criteria may encompass factors like minimum capital requirements, technology sharing, export objectives, and job opportunities generation. Ensuring your investment meets these criteria is pivotal for a smooth progression.
  3. Register the Company: To initiate your investment, register your company with the Companies Commission of Malaysia (SSM). Select an appropriate company name and furnish the requisite incorporation documents to formalize your presence in Penang's business landscape.
  4. Land Acquisition and Building Approval: Should you intend to construct a factory or warehouse, land acquisition becomes a priority. Seek guidance from local authorities to navigate the process seamlessly, acquiring the necessary approvals for your construction endeavours.
  5. Environmental Impact Assessment (EIA): Depending on your investment's nature, an Environmental Impact Assessment (EIA) might be mandatory. This assessment evaluates the potential environmental ramifications of your project, reflecting your commitment to sustainable practices.
  6. Work Permits and Visas: Facilitate the integration of your foreign workforce by procuring essential work permits and visas. Malaysia presents diverse work visa categories tailored for foreign professionals and employees, ensuring a streamlined operation.
  7. Infrastructure and Utilities: Forge partnerships with local utility providers to establish essential connections for electricity, water, and other infrastructure prerequisites critical for the optimal functioning of your factory.
  8. Taxation and Incentives: Delve into Malaysia's taxation framework and incentives targeted at foreign investors. The nation frequently extends tax benefits, grants, and other advantages to attract and nurture foreign investments.


Future Prospects for Investment in Penang


Peering into the horizon, Penang's investment prospects radiate with promise for both domestic and international investors. The region's robust economy and strategic location continue to captivate interest from a spectrum of industries, crafting an environment ripe for rewarding returns and sustainable expansion.


Thriving Industrial Sector


Penang has rightfully earned its moniker as the 'Silicon Valley of the East,' underscored by its thriving electronics and semiconductor manufacturing sectors. This trajectory is poised to intensify as technological demands escalate, ushering in a wave of advancements and innovations. The focus on research and development, innovation, and nurturing talents amplifies Penang's allure as a magnet for high-tech investments.


Strategic Infrastructure Development


Penang's steadfast commitment to infrastructure evolution significantly shapes its investment landscape. Ongoing and prospective projects, spanning port and airport expansions and enhanced transportation networks, augment the state's connectivity, turbocharging trade and logistics capacities. These infrastructural strides create a virtuous cycle, magnetizing a surge of investors while propelling economic prosperity.


Focus on Sustainable Development


Penang's unwavering dedication to sustainable progress aligns seamlessly with global trends and investor preferences. As ecological consciousness escalates, investments anchored in sustainability, green initiatives, and renewable energy ventures are poised to garner substantial interest and endorsement from conscientious investors committed to responsible choices.


Get Involved in the Investment Scene in Penang with Industrial Malaysia


In conclusion, Penang offers a competitive advantage for businesses looking to expand or set up operations in Southeast Asia. With a strong investment ecosystem, highly skilled and sustainable talents, well-connected infrastructure, and a liveable city making Penang an ideal destination for businesses.


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At , we offer a wide range of investment opportunities in the state's thriving industrial private sector. From electronics and semiconductor manufacturing to biotechnology, aerospace, and more, Penang has a diverse and robust industrial ecosystem that is constantly expanding and evolving.


to learn more about the exciting investment opportunities available in Penang's industrial sector. Let us help you tap into the tremendous potential of this dynamic and rapidly growing market, and take your business to the next level.


Chris Huah
Chris Huah
Chris Huah
REN 09683
Senior Negotiator, Industrial Specialist