JOHOR BAHRU: The Johor government’s decision to shut down digital nomad community Network School's campus in Forest City is unlikely to affect the investment plans of global technology giants such as Microsoft, Google and Oracle, but may give pause to smaller investors and entrepreneurs considering Malaysia as a base, analysts say.This is because tech behemoths’ investments typically involve long-term capital commitments, a high level of due diligence and close coordination with federal authorities, business consultants add. But for smaller industry players, Network School’s fate in Malaysia shows how efforts to build a "creative ecosystem" may quickly unravel when politically contentious issues surface, as an observer put it.Last week, Johor authorities ordered Network School to cease operations after revoking the business licence of its operator. The Iskandar Puteri City Council (MBIP), which oversees business licensing in Forest City – a sprawling commercial and residential development – said investigations found the company had breached licensing conditions and failed to comply with the approved use of the premises, warranting enforcement action under its by-laws.The community, which had hundreds of participants from countries like Russia, Canada and India, was founded by American investor Balaji Srinivasan, the former chief technology officer of cryptocurrency exchange Coinbase.
Network School closure in Forest City could spook startups, but tech giants are unlikely to blink
The saga shows foreign investors need to understand Malaysia’s multi-layered regulatory system and navigate domestic political and geopolitical sensitivities, analysts say.
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