Selangor: Gateway to Asean and beyond
Malaysia’s ambitious Invest Selangor is a powerful growth driver spurring investment in the state
The future looks bright in Southeast Asia. And the state of Selangor, a key pillar of the Malaysian economy, is well poised for inclusive growth and prosperity. In 2023 it accounted for 25.9 per cent of the country’s GDP and achieved a robust annual growth rate of 5.4 per cent, a figure well ahead of the national average of 3.6 per cent.
Not surprisingly, Selangor is also a driver of inbound investment, building on its existing strengths to attract multinationals, manufacturers, hi-tech enterprises and domestic start-ups. All are keen to take advantage of its strategic location, excellent connectivity and potential benefits as a gateway to the fast-expanding markets of Southeast Asia.
Since its establishment in 1999, Invest Selangor has played a key role in achieving Selangor’s status as “The Golden State of Malaysia”. A government body responsible for advising and supporting new business ventures, the organisation offers practical guidance on everything from licence applications, property contracts and possible partnerships to staff recruitment, local regulations and tax regimes. In its role as facilitator, it clears obstacles, making the whole planning and set-up process as smooth as possible.
“To facilitate project implementation, one of our main functions is to help coordinate the various approvals that need to be obtained from different government agencies,” says Dato’ Hasan Azhari Bin Haji Idris, CEO of Invest Selangor. “We hold monthly meetings to discuss the progress of applications, issues and challenges at the federal, state or local level, and we have both pre-investment and post-investment teams. We don’t make it compulsory for investors to engage or meet with us; it’s an option. But sometimes it can be tricky to navigate land matters or infrastructure requirements. It’s usually better if companies make us their first stop.”
Invest Selangor’s strong emphasis on regional collaboration and economic growth has yielded some impressive results. In 2023, it outperformed forecasts by recording an overall investment of RM55.3 billion (US$13.2 billion) of which just over RM17.3 billion was attributable to foreign direct investment.
The surge in economic activity resulted in 1,319 new investment projects and the creation of more than 33,000 jobs. Building on that success, Malaysia hopes to help make the Association of Southeast Asian Nations (Asean) the world’s fourth-largest economy by 2030, behind only the United States, China, Japan and Germany. Achieving that ambition means capitalising on the talents of a young, tech-savvy workforce and the demand generated by vibrant domestic markets and strong international trade ties. It also depends on revitalising established industries and seizing opportunities linked to rapidly advancing sectors such as renewable energy, the digital economy and biotechnology.
With that in mind, Invest Selangor has set out several priorities. While welcoming all investors, the focus is on developing seven core clusters, five of them in manufacturing industries and two in services.
The manufacturing group includes electrical and electronics businesses; automotive and aerospace equipment suppliers; companies in the life sciences such as pharmaceuticals, medical devices and healthcare systems; machinery and waste treatment plants; and firms in the food and beverage sector. Services comprise logistics and digital investment, including data centres, global business services and creative content technology.
“Currently, Selangor has devoted more than 3,300 acres [1,336 hectares] to the development of managed industrial parks, a concept that has proved successful in countries like Thailand and China,” says Dato’ Hasan Azhari. “We also recently launched an incentive called the Selangor Soft Landing Programme, an incentive scheme to help potential foreign and domestic investors find suitable locations for their projects in the state. If, say, a company from Hong Kong is exploring Malaysia as their next investment destination, we offer them complimentary co-working office space for two persons for a month in Kuala Lumpur city centre.”
If the company then decides to set up in Selangor and shows proof of a tenancy or signed sale application agreement, the co-working space offer is extended for another three months to include four additional people. With this degree of support, it’s much easier for a company to arrange interviews, hire staff and arrange a phased transition as new premises become ready.
“We’re also collaborating with several hotels to offer corporate rates, which aren’t normally given to new companies,” says Dato’ Hasan Azhari. “Separately, we’re working on a programme that will provide local and foreign companies with access to laboratory facilities where, for example, they can test food, cosmetics and biotech products for certification. Two universities have already signed on to the programme and four more will do so in October.
In addition to the benefits outlined above, Selangor offers numerous other advantages in the regional competition for trade and investment. First of all, the accessibility and easy connectivity afforded by Kuala Lumpur International Airport and Port Klang, now the world’s 11th-busiest container port. Secondly, the nation’s broad range of industries and its professional expertise. Thirdly, it has a deep understanding of the “China Plus One” strategy, the diversification manoeuvre now in favour with many leading manufacturers. Fourthly, an outstanding level of preparedness to assist companies at every stage of their corporate evolution.
These aspects and many others will be on show during a second series of events at the Selangor International Business Summit, which takes place from October 16-19 at the Kuala Lumpur Convention Centre.
The first series, held in July this year, was geared to meet the needs of fund managers, policymakers and major investors from Asean and beyond. It was a major success, attracting 8,550 attendees from 22 countries. The total potential transaction value from negotiations at the event reached RM12.2 billion.
The coming series will be more trade-specific, focusing on business-to-business development. Events include the Selangor International Expo (F&B), with an expected 500 booths and close to 30,000 visitors; a highly anticipated life sciences convention; and a smart city and digital economy convention featuring an impressive line-up of speakers, industry leaders, start-ups and SMEs.