Malaysia, Vietnam, and Thailand may all be the beneficiaries for inbound relocation activity as some companies move labor-intensive functions out of Singapore.
Companies including Gardenia and H&M have shifted some operations from Singapore to Malaysia, highlighting the high costs and tight labor market in Singapore and bringing investment, jobs, and other opportunities to its neighbor. Earlier in May, H&M announced that it would relocate its Southeast Asian headquarters from Singapore to Kuala Lumpur, impacting nearly 80 positions. That follows a decision by Asia Pacific Breweries Singapore to move production to facilities in Malaysia and Vietnam.
Wye Chung Khain, associate professor of economics at Universiti Kebangsaan Malaysia, said Kuala Lumpur was a “highly complementary partner” to Singapore. “Malaysia’s larger population may also contribute to a higher availability of English-speaking, tertiary-educated youth specializing in human resources, finance, IT support, and legal operations,” he added. The trend may also be accelerated by the establishment of the Johor-Singapore Special Economic Zone that is aiming to add US$26 billion a year to the Malaysian economy by 2030.
However, Singapore is expected to remain a powerhouse for relocation activity in the region. A review launched in early 2026 is aimed at securing the country’s future as a trade and financial hub.
Deputy Prime Minister Gan Kim Yong said Singapore was seeking to attract high-quality investments in sectors including advanced manufacturing, logistics, finance, and technology. “We can become one of the best places in the world to develop, test, and deploy AI solutions that solve real-world problems at scale,” said Gan. “Singapore provides the source of financial capital and intellectual capital, and Malaysia enhances it with value-adding production capacity flanked by cost-competitive input resources and abundant skilled manpower,” he added.
IAM Member Impact: IAM members in Asia can expect to see growing intra-regional activity.
Source: South China Morning Post