by 
11th November 2024
Discover the essentials of purchasing a factory in Malaysia, from power supply and land tenure to natural gas infrastructure. A complete guide for local investor or foreign investors.
Malaysia has long been a top choice for foreign investors in ASEAN, thanks to its world-class infrastructure and attractive investment policies. Additionally, the availability of freehold factories at competitive prices makes it a prime destination for those looking to establish or expand industrial operations. Here’s a comprehensive guide covering essential factors that foreign investors should consider when purchasing a factory in Malaysia.
Key Considerations When Purchasing a Factory in Malaysia
Understanding Land Tenure and Express Conditions
Before purchasing, it’s crucial to conduct a due diligence check on the land tenure and express conditions associated with the property. Check the land title document to ensure it aligns with your business activities. For instance, setting up a plastic moulding factory may require specific zoning, such as a medium industry classification, to meet environmental and local regulations. Additionally, understanding the ownership type—whether freehold or leasehold—affects long-term planning and should be confirmed with the seller or by reviewing the land title document.
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Power Supply Requirements
Factory power supply is a critical factor that varies by the size of the facility. Typically, a small factory is equipped with a supply of 150 Amperes, a medium factory with 400 Amperes, and a large factory with 1000 Amperes or more. Buyers should confirm the power capacity available, as upgrading power supply can be a lengthy process. It involves approval from TNB, the construction and handover of a TNB sub-station, cable laying, and energizing. Additionally, availability of land for a new TNB sub-station could impact future upgrades.
Floor Load Capacity
Each factory has a designated floor load capacity suited to the type of industry. Light industry factories typically range from 500 to 1,000 kg/m², medium industries from 1,000 to 1,500 kg/m², and heavy industries from 1,500 to 3,000 kg/m². Ready-built factories come with fixed floor load specifications, whereas custom-built factories offer flexibility for higher floor loads to meet specific operational needs. It’s essential to confirm floor load capacity to ensure it supports your equipment and production demands.
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Natural Gas Infrastructure
Some industries require a natural gas supply as part of their production processes. Factories located in industrial areas with existing gas infrastructure are best suited for such operations. Most ready-built factories lack gas pipelines, so applying for supply through Gas Malaysia may be necessary if natural gas is required. The supply is subject to availability, so it’s best to check the infrastructure before committing to a purchase.
Build-to-Suit Factories vs. Ready-Built Factories
Foreign investors should carefully assess whether a ready-built factory or a build-to-suit option is more suitable for their operations. Ready-built factories generally offer standard specifications and may require additional adjustments to meet unique business needs. In contrast, build-to-suit factories allow developers to customize the design, ensuring specifications align with business requirements from the ground up.
Conclusion
Purchasing a factory in Malaysia is an advantageous move for foreign investors, given the country’s infrastructure and industrial-friendly policies. However, understanding the specific requirements—from power supply and land tenure to gas infrastructure and floor load—is essential for a seamless investment. At My Industrial Specialist, we’re here to help foreign investors find factories that match their requirements, making the path to setting up operations in Malaysia straightforward and rewarding.
For tailored guidance and support, reach out to My Industrial Specialist to explore the best options for your industrial property needs in Malaysia.
