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Why Malaysia is Fast Becoming Asia’s Next Startup Hub

Why Malaysia is Fast Becoming Asia’s Next Startup Hub

There are several key elements that startups require for success, chief among them the passion for driving purpose forward, good timing, and the right ideas to turn into a business. However, a component that is often overlooked is a startup’s location.

With everything going remote, one might ask why locations are still relevant since almost any business can operate from anywhere to serve anyone. In the same way that there are ingredients required to establish a successful startup, there are also characteristics of locations that foster the ideal environment for these new businesses to thrive. Here’s what makes Malaysia a rising star and the next startup hub in Asia.

The Recipe for Malaysia’s Startup Success

What is it about Malaysia that gives startups opportunities to flourish? Several of its neighbours in Southeast Asia boast the same scenic tourist attractions and rapid development in technology, both attractive for locators and entrepreneurs. Yet somehow, Malaysia continues to pull away from its competitors when it comes to startups, thanks to a few key ingredients.

Local Focus on Digital Tech

First, it established its role as a pioneer in Asia’s digital economy. In anticipation of technologically driven businesses in the digital landscape, a special economic zone was established for high-tech businesses in Selangor way back in 1997. The country drove forward with the Malaysia Digital Economy Corporation (MDEC), which was established in 2015. It has since launched initiatives like the Global Acceleration and Innovation Network program to bring local technology companies onto the international stage.

MDEC reports that several companies earned 1 billion USD collectively since its inception. Malaysia also took steps to ensure that startups would get the resources needed for their growth, with the Malaysia Digital Hub initiative launched in 2017. Through it, startups have access to co-working spaces with high-speed internet connectivity, funding, and Intellectual Property Protection. Malaysia Digital Hub also provided these companies with connections to the global digital ecosystem and the ASEAN to unlock their potential further.

These examples illustrate how startups are given opportunities to grow in Malaysia, and how setting up a new business in this environment is ideal given the support provided by several initiatives.


Another essential ingredient that gives Malaysia an edge is its healthy economy. Its annual GDP in 2019 was at 364 billion USD, just behind its prospering neighbor Singapore at 372 billion USD. Businesses in fintech and e-commerce continue to boom, and these markets are only projected to increase in the coming years, making them a perfect platform for startups to establish themselves and grow.

Local Talent

Last but definitely not least is the talent. None of these startups would see this kind of growth were it not for talent that keeps driving organizations and communities to succeed. Expat Bets’ guide to Malaysia highlights the country’s diversity, geographical wonders, and affluence. These characteristics make Malaysia an attractive place to tour but, more importantly, an ideal location for foreign talent to live and work. It also encourages Malaysian professionals abroad and local graduates to pursue careers in the country’s growing business tech industry.

Professionals working for startup companies in Malaysia must also recognize two things: first, their pivotal role as part of the country’s SMEs; and second, the gap present in the deep-tech talent funnel. While joining multinational companies is an attractive option, understanding the pressing need for more innovation to take place and acting on it can contribute to more complex and valuable solutions as well as growth for the country.

Conclusion: The Future of Malaysian Startups

Though promising, the future of Malaysian startups is not without its challenges. Crises will always stunt progress, and this case is no different with COVID-19 affecting most businesses. However, history has shown time and time again that markets experience impressive growth spurts after such events. Indeed, our feature on how Malaysian startups came together in a time of crisis shows resilience and innovation, with the likes of HealthMetrics and Hauz providing free services — demonstrating just how promising the Malaysian startup landscape continues to be.