Malaysia: Asia’s #7 Startup Hub

When launching a startup, one of the biggest challenges is deciding where to base your operations. Location affects everything—from affordability and access to skilled talent, to the business climate and internet reliability—so choosing wisely can make all the difference.

As an industry leader in startup accounting, Intuit QuickBooks wanted to uncover which Asia countries offer the most favourable conditions for entrepreneurs. The Asia Startup Index Study compares how easy and appealing it is to start a business across the region. This article focuses on Malaysia, which performed strongly across several categories, including AI readiness, startup affordability, and access to finance.

Rather than focusing on a single factor, the Asia Startup Index Study analyzed 17 indicators spanning infrastructure, access to capital, costs, business environment, and talent—all of which contribute to a healthy startup ecosystem. Here, we take a closer look at Malaysia’s results to see how it measures up in these areas and what that means for entrepreneurs considering starting a business in Malaysia.

Keep reading to find out why Malaysia ranked 7th overall in our study, and to discover the advantages it offers entrepreneurs—especially in the areas of AI Readiness, Cost of Starting a Business, and Lending Rates.  

• Malaysia: Key Insights
• The Best Countries in Asia to Start a Business
• Malaysia’s Rank for Startup Factors
• Malaysia’s Internet Speed & Connectivity
• Malaysia’s Talent Pool & Skills
• Malaysia’s Business Landscape
• Malaysia’s Cost of Living for Startups
• Malaysia’s Happiness & Work-Life Balance
• Why Malaysia is a Startup Hub
• What the Experts Say
• Methodology

Malaysia: Key Insights

Malaysia ranks #7 overall in the Asia Startup Index, standing out for its strong earning potential, digital readiness, and competitive startup costs. For founders, the country offers a rare balance of affordability, skilled talent, and improving access to capital—making it an increasingly attractive destination for new ventures.

Key Findings:

• Malaysia ranks 7th overall in Asia: Malaysia earns a total score that places it among the top 10 startup destinations in the region, reflecting its balanced ecosystem for new businesses.
• Strong Average Income (5th in Asia): With an average monthly salary of USD $3,080.70, Malaysia offers one of the highest earning potentials in the region, helping attract and retain skilled professionals.
• AI Readiness (8th in Asia): Malaysia demonstrates a growing capacity for AI adoption, supported by national digital transformation initiatives and a workforce adapting to emerging technologies.
• Low Startup Costs (9th in Asia): Founders benefit from relatively low costs to start a business, providing a strong entry point for entrepreneurs seeking to establish operations with limited initial capital.
• Competitive Lending Environment (9th in Asia): With a prime lending rate of 5.3%, Malaysia offers affordable access to finance, supporting business expansion and innovation.

The Best Countries in Asia to Start a Business

The Asia Startup Index Study by Intuit QuickBooks highlights the region’s most promising environments for entrepreneurs, ranking 24 countries on a range of factors. At the very top, Singapore claims the number one position, reflecting its strong digital infrastructure, educated workforce, and competitive business landscape. Other high performers include China, Hong Kong (SAR) and Thailand, each offering their own unique advantages for founders looking to establish or expand their ventures.

Against this regional backdrop, Malaysia’s performance is especially significant. Positioned among the top 10 countries, Malaysia stands out as a competitive hub in Asia’s dynamic startup ecosystem. Its overall score places it alongside more established startup centers, showing that it can offer a blend of affordability, talent access, and growth potential that appeals to founders. For entrepreneurs weighing their options across Asia, these results underline Malaysia’s emergence as a serious contender, and reinforce Intuit QuickBooks’ role in providing data-driven insights to guide smarter business decisions.

Malaysia’s Rank for Startup Factors

For this study, we conducted an analysis of 17 key indicators that can contribute to the success of startup businesses in that country. These indicators were then grouped into five categories:

1. Internet Speed: Fast and reliable internet connectivity makes a huge difference when starting a business, especially when you’re relying on remote collaboration. This study measured the average broadband speed (Mbps) across 24 countries in Asia.  

2. Talent Pool: Three indicators were measured as part of this category:

• AI readiness: A country’s preparedness for AI adoption gives startups an edge by making advanced tools and technologies easier to access and integrate.
• Workforce Advanced Education (%): A highly educated workforce gives startups access to skilled talent—driving innovation, efficiency, and faster growth.
• Average monthly net salary (USD): Higher wages indicate stronger purchasing power and talent attractiveness.

3. Business Landscape: We measured a number of factors that reveal how smooth (or challenging) it is to run a company day-to-day. These factors included:

• FDI net inflows (% GDP): More foreign investment suggests an open, attractive economy.
• Business density (new firms per 1 000): More new firms signal a dynamic start‑up scene.
• Predicted GDP growth 2026 (%): Faster growth suggests expanding markets.
• Private credit (% GDP): Higher credit depth indicates a well‑developed banking sector.
• Time to start business (days): Fewer days mean less bureaucratic delay.
• Cost to start business (% GNI): Lower costs ease entry.
• Corporate tax rate (%): Lower taxes reduce ongoing liabilities.
• Prime lending rate (%): Lower interest rates improve access to finance.
• Inflation rate (%): Low inflation preserves purchasing power and reduces uncertainty.
• Unemployment rate (%): Lower unemployment implies a strong labour market.

4. Cost of Living: High costs shorten the runway for early-stage startup ventures, while affordable markets give founders more breathing room to experiment and scale. For this category, we considered the following:

• Weekly rent (USD): Lower rents reduce start‑up operating costs.
• Cost of living index: Lower living costs stretch founders’ runway and wages.

5. Quality of Life: A happier workforce is more engaged and productive, and founders thrive when they can balance personal wellbeing with professional success. 

Next, we’ll reveal how Malaysia scored within these categories, and explain in greater detail how these metrics affect startup businesses.

Malaysia’s Internet Speed and Connectivity: #9 in Asia

Malaysia ranked in position 9 in our study for internet speed, with a 148.5 Mbps average broadband speed. Singapore topped the list at 393.15 Mbps, Pakistan ranked last at 16.23 Mbps, and the regional average sits at 133.20 Mbps—placing Malaysia above the regional benchmark.

Internet speed is a critical factor for startups, as it underpins everything from cloud-based collaboration and online sales to digital marketing and customer support. Malaysia’s position as 9th in Asia for internet speed highlights its growing strength in digital infrastructure. For entrepreneurs, this makes Malaysia an attractive environment to compete in today’s fast-moving digital economy.

Malaysia’s Talent Pool and Skills: #7 in Asia

Malaysia ranks among Asia-Pacific’s stronger performers for talent and workforce capabilities, balancing affordability with growing digital readiness. Its educated workforce, improving AI infrastructure, and competitive salary levels create an environment where startups can access skilled talent while maintaining manageable operating costs.

These metrics combine to demonstrate Malaysia’s growing ability to compete in the region’s tech-driven startup ecosystem, balancing cost efficiency with digital progress.

Key insights:

• AI readiness: Malaysia ranked #6 for AI readiness, with a high score of (71.4/100)
• Workforce with advanced education: 77.9% of workers
• Average monthly income: (USD $888.4)

Here are the small business startup statistics we analyzed to get these results:

Average Monthly Income: US $888.40

At USD $888.40, Malaysia’s average monthly income falls short of the regional average (of $1,056)—but that’s not necessarily bad news for startups. Lower wages mean leaner operations and more room to experiment, which can be a major advantage for founders trying to build something sustainable. In other words, Malaysia’s affordability might just be its competitive edge. 

AI Readiness: #6 in Asia

AI readiness measures how well a country is positioned to adopt and benefit from artificial intelligence technologies—from government support and digital infrastructure to workforce skills.

Malaysia ranked #6 with a score of 71.4/100, which was well above the average of 56.32/100 for all countries in this study. 

Its strong AI readiness and highly educated workforce make it an attractive place to start a business.

Workforce with Advanced Education: 77.9%

A highly skilled workforce is a key ingredient for startup success. This metric measures the percentage of adults in the labour force with tertiary education, showing how well-equipped a country’s workforce is to support innovation, adopt new technologies, and drive business growth.

Malaysia scores 77.9%, ranking 12th in Asia and well above the study average of 73.30%.

Malaysia’s Business Landscape: #11 in Asia

Overall, Malaysia offers a stable environment for startups—combining financial resilience, low inflation, and affordable borrowing with moderate startup costs and steady growth. While it ranks mid-table overall (53.09/100), its strong banking sector and price stability create a solid foundation for emerging ventures.

Key insights:

• Private credit: 116.2% of GDP (#9 in Asia, regional average: 88.69%)
• Lending rate: 5.3% (#6, regional average: 9.44%)
• Cost to start a business: 11.1% of GNI (#20, regional average: 7.66%)
• Predicted GDP growth (2026): 4.0% (#11 in Asia)
• Inflation rate: 1.8% (#8, regional average: 4.44%)

Overall, Malaysia presents a balanced environment for startups—combining financial stability, affordable borrowing, and low inflation with moderate startup costs and steady economic growth. While it ranks mid-table overall, the country’s strong banking sector and controlled inflation create a supportive foundation for emerging businesses.

Private Credit: 116.2% of GDP

Malaysia ranks #9 in Asia for private credit, at 116.2% of GDP, well above the regional average of 88.69%.

This reflects a well-developed banking sector and strong credit availability, giving startups access to financial tools and investment capital to scale efficiently.

Cost to Start a Business: 11.1% of GNI

At 11.1% of GNI, Malaysia ranks #20 in Asia for startup costs—above the regional average of 7.66%.

This indicates relatively higher upfront costs to register and launch a business, but also reflects the country’s formalized regulatory environment. Entrepreneurs may need to allocate more resources during setup, though long-term operating costs remain manageable.

Lending Rate: 5.3%

Malaysia’s average lending rate of 5.3% ranks #6 in Asia, well below the regional average of 9.44%.

Favorable borrowing conditions make it easier for startups to access affordable financing, helping new ventures invest in equipment, operations, and growth.

Predicted GDP Growth (2026): 4.0%

Malaysia’s projected GDP growth of 4.0% in 2026 ranks #11 in Asia, slightly above the study average of 3.66%.

This steady growth outlook signals a healthy, expanding market with growing demand for goods and services—offering startups room to scale sustainably.

Inflation: 1.8%

Malaysia maintains a low inflation rate of 1.8%, ranking #8 in Asia and well below the regional average of 4.44%.

This price stability helps startups plan with confidence, manage costs effectively, and operate in a predictable economic environment.

FDI Net Flows: 3.7% GDP

Malaysia’s FDI inflows of 3.7% of GDP fall slightly below the regional average of 4.92%, but remain competitive among major Asian economies.

The country attracts more investment relative to peers like Indonesia (1.7%), Thailand (1.9%), India (0.7%), and South Korea (1.1%), highlighting its continued appeal as a regional business hub.

Business Density: 2.2 New Firms Per 1,000 People

With 2.2 new firms per 1,000 people, Malaysia’s business density sits below the regional average of 3.57, but above markets such as Indonesia (0.3), the Philippines (0.3), India (0.2), and Thailand (1.5).

This indicates a moderately active entrepreneurial landscape with growing startup activity supported by improving digital infrastructure.

Time to Start a Business: 17.5 Days

It takes an average of 17.5 days to start a business in Malaysia—slightly faster than the regional average of 20.77 days. For context, the fastest country in the region is Georgia (1 day) and the slowest is Laos (173 days).

Malaysia’s result shows steady progress in administrative efficiency, supported by digital reforms aimed at simplifying business registration and licensing.

Corporate Tax Rate: 24%

Malaysia’s corporate tax rate of 24% is higher than the regional average of 22.33%, but remains competitive compared to China (25%), the Philippines (25%), and Japan (30.60%).

While higher taxes can affect profitability, Malaysia’s stable fiscal system and business-friendly policies continue to support investor confidence. 

Unemployment Rate: 3.8%

With unemployment at 3.8%, Malaysia performs better than the regional average of 4.35%. 

A stable labour market and accessible talent pool provide startups with reliable human resources while contributing to steady consumer demand.

Malaysia’s Cost of Living for Startups: #16

To assess affordability for startups, we examined Malaysia’s performance in the Cost of Living category, where it ranked #16 overall with a score of 33.35/100.

Key insights:

• Malaysia ranked #17 for weekly rent, at just USD $90 compared to the study average of $145.75.
• Malaysia placed #14 for the cost of living index, at 30.1/100 below the overall study average of 36.93/100.

Here’s what the data revealed:

Average Weekly Rent: USD $90

Malaysia’s average weekly rent is just USD $90, well below the regional average of $145.75. Lower office or co-working space costs make it easier for startups to establish a base without straining budgets.

Cost of Living Index: 30.1/100

Malaysia ranked #14 for its cost of living index, showing that day-to-day expenses such as food, transport, and services remain affordable. This allows founders to stretch wages further while maintaining a good quality of life, supporting sustainable growth for their teams. 

Malaysia’s Quality of Life

Malaysia ranked 10th for happiness, with a score of 58.30/100. While not among the very top performers such as Singapore (95.80/100) and Taiwan (91.70/100), Malaysia’s results point to a society with a solid baseline of life satisfaction.

For startups, this matters because a happier population generally translates into stronger community wellbeing and healthier workplace culture. Founders and employees are more likely to thrive when the broader social environment supports work-life balance, making Malaysia a competitive option for entrepreneurs who value both professional growth and quality of life.

Why Malaysia is a Startup Hub

Malaysia’s combination of affordability, talent, and macroeconomic stability makes it a compelling launchpad for entrepreneurs in the Asia-Pacific region. As the startup ecosystem continues to mature, founders can look forward to an environment that balances innovation with accessibility.

Ready to launch your business in Malaysia? Discover how Intuit QuickBooks Online can simplify accounting, cash flow, and compliance for your startup.

Want to see how Malaysia compares with other regions? Explore our Asia Startup Index insights for Singapore, the Philippines, and Hong Kong. You can also learn more about how to start a business in Malaysia in our startup guides. 

What the Experts Say

Many factors can affect a country’s business startup worthiness. For additional insight, we asked Chun How Cheah, Managing Director at High Pines Training & Consultancy Sdn Bhd, for his thoughts.

"With Malaysia’s average internet speed of 148.5 Mbps—faster than the regional benchmark—digital transformation is no longer a distant goal; it’s happening now,” says Chun How Cheah, Managing Director at High Pines Training & Consultancy Sdn Bhd.

“Adopting cloud-based solutions such as Intuit QuickBooks Online has transformed how my accounting and consulting practice operates—not just in Malaysia, but globally. Faster connectivity means we can serve clients in real time, collaborate seamlessly across borders, and deliver insights instantly. For startups, that kind of digital readiness is a game-changer.”

Methodology

The aim of this study was to help founders compare the ease and appeal of launching a business across Asia. Rather than focusing on just one aspect (like tax rates or venture capital), Intuit QuickBooks pulled together a broad basket of 17 indicators. These cover:

• Infrastructure: How fast and reliable your internet connection is (average broadband speed).
• Capital access: How much foreign investment a country attracts and how deep its banking sector is (FDI inflows and private credit as a share of GDP).
• Costs: Rent, cost of living, net salaries, corporate tax and lending rates, and the cost of starting a company.
• Business environment: How long it takes to register a company, how easy the process is, and expected economic growth.
• Talent and fundamentals: Workforce with advanced education, unemployment and inflation rates, happiness scores, and a government AI‑readiness rating.

We chose these factors because a healthy start‑up ecosystem needs both affordable overheads and access to talent, capital, and stable economic conditions.

How we standardized data indicators for comparison

Each indicator (Mbps, dollars, percent of GDP, number of days) was measured differently. To put them on the same footing we turned every value into a percentile score. Think of a percentile as a “score out of 100” showing how a country ranks against its peers: the higher the percentile, the better. For indicators where bigger numbers are good (like faster internet or more FDI), higher values got higher percentiles. For indicators where smaller numbers are preferable (like lower rent or taxes), we flipped the values so that a smaller cost results in a higher percentile. This way, “better” always translates into a higher score.

Treating all metrics equally

Rather than arbitrarily deciding that, say, broadband speed is twice as important as inflation, we simply averaged the percentile scores. Each of the 17 indicators counts the same towards the final score. If data for a country were missing (for example, Taiwan’s FDI figure or a recent lending rate for Laos), we averaged only the available metrics. This avoids penalizing countries for gaps in international data, but it also means scores for those countries are based on fewer inputs and should be interpreted cautiously.

Where does the data come from?

Most numbers come from recognized international sources such as the World Bank, IMF, Oxford Insights, UN Happiness Report, the Speedtest Global Index, and national statistics. For living costs and rents, we used Numbeo, which aggregates user‑submitted prices; this provides broad coverage but may not match official statistics. We always used the most recent year available (usually 2023–2024, 2024-2025) but note that for some indicators (like prime lending rates in Japan or Laos) the latest official data are a few years old. Corporate tax rates are headline statutory rates; actual liabilities can differ depending on incentives or sectors.

Reading the results

The final index produces a score between 0 and 100. A higher score means a country offers faster internet, more investment, lower operating costs, better talent supply and a more favorable regulatory climate, on average. Singapore leads the ranking thanks to world‑class digital and financial infrastructure, fast incorporation and abundant skilled workers. Malaysia is mid‑table, benefiting from low costs and a healthy banking sector but still facing some red tape. The Philippines falls lower due to slower digital speeds and longer start‑up times, despite its strong growth and young workforce.

Caveats to keep in mind

• Data gaps: Not every country reports every metric. Missing values are omitted from that country’s average, which can boost or dampen the overall score.
• Data freshness: Some metrics, particularly lending rates, use the most recent available figure even if it dates back a few years.
• Crowd‑sourced data: Numbeo figures on rent and living costs are based on user submissions and may be less precise than official statistics.
• Tax and regulatory complexity: Headline corporate tax rates and ease‑of‑doing‑business scores don’t capture all sector‑specific incentives or bureaucratic nuances.
• Outliers: For visual comparisons, we trimmed obvious outliers (e.g., extreme FDI and inflation values) to make charts easier to read. The index calculation still uses the full dataset.