Malaysia’s Global Business Services (GBS) industry, long concentrated in Klang Valley and Penang, is encouraged to explore GBS centres with state-specific niches to leverage local strengths and support the sector’s growth.
According to the GBS Malaysia Strategy 2022–2027 Mid-Term Report, Selangor and Kuala Lumpur accounted for about 87 per cent of new GBS companies established between 2021 and mid-2025, reflecting Klang Valley’s dominance, while Penang remains another key hub for multinational service centres.
Malaysia’s GBS industry refers to companies and centres that centralise business operations such as finance, human resources, IT and other support functions into shared service hubs that support global or regional services.
This allows corporations to streamline and optimise core processes from one location.
Raymond Davadass, Chair of Digital Global Business Services Council Malaysia (GBS Malaysia), said at the (Y)OURSPACE MY Edition talk on March 2 that several states, including Johor, Perak, Sabah and Sarawak, are exploring opportunities to establish GBS centres. This reflects growing interest in the sector.
However, he added that simply setting up operations across different states may not be enough. Instead, the industry should identify where each location can develop its own strengths.
If you want customer service, maybe you should be going to Sabah. If you’re looking at oil and gas-related work, maybe you should be going to Sarawak.
If you’re looking at analytics work, maybe you should be looking at Klang Valley.
“Together with the government, we are looking at how the industry can spread even further beyond its current concentration in Klang Valley,” he said, adding that clearer specialisation would help organisations decide where to locate their operations.
The council, GBS Malaysia is a chapter of PIKOM (The National ICT Association of Malaysia) that represents and supports the GBS industry in Malaysia.
Malaysia has become an attractive destination thanks to its multilingual workforce, digital infrastructure and business-friendly environment.
The Mid-Term Report projects the industry could reach RM28.14 billion in revenue by 2025, with around 750 companies currently operating in the country’s growing GBS ecosystem.
Davadass said the industry is shifting from cutting costs to creating value, driven by data, automation and AI. He called knowledge, technology and skilled people the ‘holy trinity’ for sustaining growth.
Organisations, he added, “will also need to redesign workflows and upskill their workforce to remain competitive, beyond adopting new technologies.”
Looking ahead, Davadass said industry players are working with the government on initiatives such as a national digital sandbox, faster employment pass approvals and pilot grants for digital innovation upskilling of the workforce, as Malaysia aims to further strengthen its position as a regional GBS hub.
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