Foreign investors eyeing MY's green tech, data centre investments

Malaysia has reportedly become increasingly attractive to foreign investors. This is due to several factors such as the country's political stability and track record in exercising fiscal responsibility, according to research conducted by UBS Global Research (UBS).

Other contributing factors includes Malaysia's competitiveness in the electrical and electronics (E&E) sector and energy policies leading to net zero targets, UBS reportedly added and as reported by Bernama.

In a note, UBS analyst Nicole Goh reportedly said that the country has a deep talent pool, numerous free trade agreements and good scores regarding ease of doing business factors. 

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She added that the localisation of foreign direct investment (FDI) has also been successful in Malaysia, citing that the E&E ecosystem has benefitted from demand from large multinational company investments. 

At the same time, the positive spillovers have extended to constriction companies and the labour market, Goh reportedly said. Goh reportedly stated that the global minimum tax of 15% in 2025 will have a negligible impact on competing for FDI. 

This is especially since many countries are seeking to reshore companies through subsidies despite intensified trends in de-globalisation, Goh reportedly said, adding that it would not stop large players from expanding globally. 

Aside from the E&E sector, green technology, machinery and metal fabrication are also sectors of interest. Meanwhile, a strong interest in data centre investments remains, Goh reportedly said. 

In the past year, Malaysia has been a key destination for data centre investments for major tech giants, including Google. Earlier this month, Google said that its investments in Malaysia is estimated to support more than US$3.2 billion in positive economic impact and will create 26,500 jobs by 2030. 

Google said that its cloud and data centre infrastructure in Malaysia will help meet growing demand for Google Cloud capabilities and AI innovations, and the company’s popular digital services such as Search, Maps, and Google Workspace.

The cloud region will also deliver high-performance and low-latency services as well as offer customers key controls that allow them to maintain the highest security, data residency, and compliance standards, including specific data storage requirements.

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