If your biggest customer has just opened a plant in Penang, the question is whether your factory should follow it, and where. This is the short version of my guide for foreign suppliers. The full guide is written in Chinese first, for the Taiwanese, Chinese and Singaporean companies most likely to make the move.
Penang approved RM17.3 billion of manufacturing investment in the first half of 2026, RM12.8 billion of it foreign, according to the Chief Minister. On 7 October, PEN S J Electronics leased 8.5 acres from PDC at Batu Kawan Industrial Park 3 for a plant worth more than US$70 million.
Key takeaways:
- Three areas: Bayan Lepas (mature, next to the airport, little free land), Batu Kawan (newer, larger plots, where much new semiconductor investment is landing) and Seberang Perai (the most choice, close to the port, including freehold private parks).
- Foreign companies can buy industrial property with state approval through a lawyer, and must hold it for three years before reselling.
- Fees: RM40,000 per title for a foreign company, RM20,000 for a foreign individual.
- PDC park land is usually leased; private parks such as Northern TechValley @ BKE sell freehold detached factories.
- Supply is tight: Knight Frank says Grade A facilities in Penang are often leased before completion.
Which area fits
| Bayan Lepas | Batu Kawan | Seberang Perai | |
|---|---|---|---|
| What it is | Penang's original electronics cluster, with the Free Industrial Zone | The new industrial town across the Second Bridge | The long-established manufacturing base around Prai, Bukit Minyak and Seberang Jaya |
| Main parks | Bayan Lepas FIZ (four phases), Bayan Lepas Technoplex | Batu Kawan Industrial Park (including phase 3), Penang Science Park | Prai FIZ, Prai Industrial Park, Bukit Minyak, Seberang Jaya, Bukit Tengah, plus private parks |
| Access | Next to Penang International Airport | Second Bridge to Bayan Lepas; North-South Expressway | Closest to the North Butterworth Container Terminal; Butterworth-Kulim Expressway to Kulim |
| Suits | High-value, air-freighted products near existing customers | New plants needing larger plots near Batu Kawan customers | Logistics, port-linked operations, or buyers wanting freehold |
Buy or lease
Most suppliers lease first: it keeps capital free and lets you move if orders change. Buy, or lease land to build, once the Penang operation is settled or you need special specifications such as heavy power, clean rooms or high floor loading.
For freehold, Northern TechValley @ BKE is a 176-acre private park in Seberang Jaya. Its first phase has one-and-a-half-storey detached factories on about one acre (31,512 to 44,151 sq ft of floor space) and two acres or more (59,687 to 68,467 sq ft), with a 9-metre production ceiling and 20 kN/m² floor loading. The developer hasn't published prices.
The rules for foreign buyers
Under the Penang land office guideline updated 1 August 2024:
- Foreigners and foreign companies need state approval to acquire property, applied for through a lawyer.
- Industrial land is approved on conditions the state sets, and can be resold only after three years from the SPA date.
- Application fees per title: RM20,000 for a foreign individual, RM4,000 for a permanent resident, RM40,000 for a foreign company.
- Acquiring land by lease or sublease also counts as acquiring property.
- Agricultural land is generally barred, with narrow exemptions requiring at least 30% Malaysian ownership.
- For homes and commercial buildings, the minimum purchase price for foreigners is RM1,000,000 for strata and RM3,000,000 for landed on the island, and RM500,000 for strata (RM1,000,000 for a foreign company) and RM1,000,000 for landed on the mainland. The guideline doesn't list a separate minimum for industrial land, and its levy table is written for residential property; confirm with your lawyer how they apply to an industrial title.
Separately, under the Industrial Coordination Act 1975, manufacturers with shareholders' funds of RM2.5 million or more, or 75 or more full-time employees, need a manufacturing licence from MIDA. Check MIDA's current rules.
Zac’s Take
Zac Ong
The most common mistake I see suppliers make is buying land first. Lease a factory in the right area, get production running, then decide whether to lease PDC land and build, or buy a freehold factory in a private park. Foreign companies can own industrial property in Penang, but the state approval, the RM40,000 fee and the three-year resale bar belong in your timeline from day one. And plan where your engineers and managers will live: it affects hiring.
Tell me the floor area, power load and ceiling height you need, and whether you want to buy or lease, and I'll shortlist factories in Bayan Lepas, Batu Kawan and Seberang Perai. I can also help with homes for your management team; see 1,000 new jobs in Batu Kawan: who will rent your condo and selling or buying commercial and industrial property.
Sources: Penang land office guideline on property acquisition by non-citizens and foreign companies (updated 1 August 2024); PEN S J Electronics and Penang's first-half 2026 investment figures from EdgeProp and The Edge (October 2026); Northern TechValley @ BKE specifications from the developer's materials via Penang Property Talk; Knight Frank's 1H 2026 industrial commentary via The Edge; Batu Kawan rents from a local industrial agent's 2026 guide.
Disclaimer: This is general information, not legal or investment advice. Confirm approvals and licensing with a lawyer and MIDA before committing.