Kuala Lumpur, 22 January 2026 — Malaysia’s manufacturing sector continued to attract strong foreign interest in 2025, with foreign investment approvals surging to RM357.1 billion, according to the latest data released by the Malaysian Investment Development Authority (MIDA).
The figure marks a significant contribution by foreign investors to Malaysia’s manufacturing landscape, reflecting rising confidence in the country’s business environment and long-term growth prospects. Key subsectors that drew major approvals included electronics, machinery and equipment, chemicals, and transport equipment, with many projects earmarked for high-value and technology-driven activities.
Clear Shift Toward High-Value Manufacturing
Analysts said the jump in investment approvals signals a shift toward high-tech and knowledge-intensive manufacturing, aligning with Malaysia’s broader ambition to become a regional hub for advanced industries. Technology-linked projects such as semiconductor components, precision parts and automation have attracted significant foreign capital flows.
The country’s manufacturing investment performance also dovetails with supportive industrial policies and incentives aimed at boosting output in strategic segments such as electrical and electronics (E&E), aerospace, medical devices and renewable energy components, which global companies view as promising long-term hubs for production and export.
Economic Impact and Job Creation
The influx of foreign direct investment (FDI) approvals is expected to drive job creation, upgrade skills and facilitate technology transfer across Malaysia’s manufacturing workforce. Newly green-lit projects are projected to generate tens of thousands of employment opportunities, particularly in specialised engineering, quality control and research services.
Government officials said the strong approval numbers will help sustain economic momentum as global supply chains continue to diversify beyond traditional manufacturing bases. The manufacturing sector — already one of the pillars of Malaysia’s economy, is seen as a key driver of exports, productivity and innovation through the rest of 2026 and into the next decade.
Policy Support and Strategic Alignment
The high value of approvals reflects the impact of policies such as industry-oriented tax incentives, targeted investment facilitation mechanisms and the growing attractiveness of Malaysia as a gateway to ASEAN and broader Asian markets. Officials have also pointed to accelerated government efforts to improve infrastructure, logistics connectivity and regulatory frameworks as factors that bolster investor confidence.
In addition, Malaysia’s continued efforts to promote sustainable and inclusive investment, including green manufacturing and compliance with environmental, social and governance (ESG) standards, have resonated well with global companies seeking long-term partnerships in the country.
Outlook and Competitive Position
Observers say Malaysia’s manufacturing investment momentum should help the country remain competitive amid shifting global production and supply-chain strategies, as companies seek stable, cost-efficient and well-connected hubs in Asia to serve regional and global demand.
However, they cautioned that execution and implementation, including workforce readiness and infrastructure delivery, will be crucial to turning approvals into operational facilities that deliver economic impact and sustained productivity growth.
