Kuala lumpur: Malaysia has secured RM92.8 billion in approved investments for the first quarter of 2026 (1Q 2026), with Japan emerging as the largest foreign investor and domestic investment recording its strongest year-on-year growth in the reporting quarter.
According to BERNAMA News Agency, the Malaysian Investment Development Authority (MIDA) announced that the investments encompass 1,249 projects across the services, manufacturing, and primary sectors.
While the total value recorded a slight 0.2 per cent decline compared to RM93.0 billion in 1Q 2025, these approved projects are anticipated to create 50,226 new jobs, marking a 46.7 per cent increase from the same period last year. This underscores the stronger labour market impact from approved investments. Foreign investments accounted for 60.5 per cent or RM56.2 billion of the total approved investments, while domestic investments grew 13.0 per cent year-on-year to RM36.6 billion, representing 39.5 per cent of total approvals, reflecting growing confidence among Malaysian businesses.
Among foreign investors, Japan emerged as the largest source of approved investments, with RM21.5 billion, a significant increase from RM1.6 billion recorded in 1Q 2025. This was followed by the People's Republic of China and the United States, both contributing RM10.1 billion, Singapore with RM6.7 billion, and Thailand with RM2.5 billion. The strong Japanese investment performance reflects the deepening economic ties between Malaysia and Japan under the Malaysia-Japan Comprehensive Strategic Partnership established in December 2023. Notably, 93.6 per cent of Japanese approved investments in 1Q 2026 were channelled into digital transformation activities, indicating Malaysia's growing role in regional high-technology and digital supply chains.
Across the states and federal territories, Selangor recorded the highest value of approved investments at RM33.5 billion, followed by Johor and the Federal Territory of Kuala Lumpur, both at RM16.9 billion, Penang at RM6.2 billion, and Sarawak at RM4.0 billion. The top three states have solidified their standing as global data centre hubs, driven by the integration of Cyberjaya's mature infrastructure, Johor's strategic positioning as a key alternative to Singapore, and Kuala Lumpur's role as the nation's primary network connectivity and financial heart.
MIDA chairman Tengku Datuk Seri Zafrul Abdul Aziz stated that the 1Q 2026 investment performance sends a clear signal that Malaysia's economic fundamentals are strong, with both global and domestic investors continuing to place confidence in the nation. With a GDP growth of 5.4 per cent and Moody's projecting Malaysia as the fastest-growing A-rated economy over the next two years, Malaysia is not just participating in regional value chains but is emerging as a strategic hub for industries defining ASEAN and Asia's next decade.
The services sector remained the largest contributor, accounting for RM60.8 billion or 65.5 per cent of total approved investments, involving 731 projects expected to create 19,758 new jobs. Growth was mainly driven by the information and communications subsector, which contributed RM38.9 billion, supported by the growing global demand for artificial intelligence (AI) and digital transformation. Investments in data centres and cloud computing alone accounted for RM34.6 billion across 33 projects, representing 88.9 per cent of the subsector's total approvals.
The manufacturing sector attracted RM24.1 billion in approved investments across 501 projects and is expected to create 30,468 jobs, representing 60.7 per cent of total expected jobs, with key industries including electrical and electronics, chemicals, machinery and equipment, food manufacturing, and transport equipment. The primary sector recorded RM7.9 billion in approved investments across 17 projects, up 418.2 per cent from a year ago, driven entirely by oil and gas projects involving offshore development and exploration activities, particularly in Sarawak.
Malaysia's investment outlook remains resilient, supported by a steady pipeline of quality investment proposals. As of May 5, 2026, MIDA is facilitating a solid pipeline of 182 potential projects, collectively valued at RM38.3 billion. MIDA is also in active discussions for an additional RM91.0 billion worth of potential investments, signalling sustained investor interest and confidence in Malaysia's long-term economic direction and pro-business policies.
MIDA chief executive officer Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid commented that Malaysia's investment performance reflects the country's strong facilitation and project execution capabilities. Despite continued global headwinds, Malaysia remains firmly on investors' radar, supported by clear policies and strong economic fundamentals. The Asia Manufacturing Index 2026 ranks Malaysia second in Asia after China, its highest position in the index to date, reflected by the implementation stages reached by over 85 per cent of the manufacturing projects approved since 2021.