Since independence from the British Empire in 1957, Malaysia has rapidly transformed its predominant economy on agriculture and primary commodities, to becoming an export-driven nation spurred on by high technology, knowledge-based and capital-intensive industries. This rapid evolution is based primarily on political and economic stability, investor friendly business policies, world-class infrastructure, a versatile workforce that is young and educated and well-defined development strategies to drive the nation forward.

Malaysia had attracted a record RM162.4 billion in investments last year, of which RM34.8 billion were in the form of foreign investments. The record level, its highest in six years, exceeded the official target by 9.1 per cent despite the global external uncertainties from the eurozone and the US. Most of the investments were in new and emerging technologies, particularly within the aerospace, semiconductors, solar, machinery and equipment, petroleum and petrochemical products and medical devices as well as the oil and gas services sector.

As one of the most technologically developed countries among industrialising nations in the ASEAN region and its strategic location at the heart of Asia, Malaysia has become an attractive investment destination for offshore manufacturing operations. To date, global corporations from more than 40 countries have invested in over 5,000 companies in Malaysia’s manufacturing, construction, oil and gas and other sectors.

In 2010, the Federal Government created the New Economic Model (NEM) that will be driven by an Economic Transformation Programme (ETP) that will fast track Malaysia’s goals towards becoming a high income by 2020 and boost annual per capita income to US$15,500, from US$9,750 in 2012.

Starting from 2013, the nation is expecting new record capital inflows into several of the country’s economic sectors namely the oil and gas, infrastructure and real estate sectors. These include the RM60 billion Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor, the RM3.8 billion Sabah Oil and Gas Terminal in Kimanis, the RM36 billion Mass Rapid Transit project in Kuala Lumpur, and the Tun Razak Exchange, a 70-acre development expected to generate a gross development value of RM26 billion.

Given the potential for higher-than-average growth coupled with pro-business policies and incentives, Malaysia should remain an attractive destination for foreign portfolio investors in the long term.

Read: Malaysia's 2013 Forecast Revised by Business Times, April 08, 2013