Step-By-Step Process: How to Buy a Factory in Malaysia

Introduction

Malaysia's industrial property market continues to attract local and foreign investors thanks to its strategic location, port access, and affordable land. Whether you're expanding your business, relocating operations, or planning to invest, buying a factory in Malaysia requires clear due diligence, approvals, and planning.

Here’s a detailed step-by-step guide to help you confidently navigate the process.

Step 1: Define Your Requirements

Start by determining:

• Factory location (e.g., Klang, Johor, Penang)

• Land size and built-up area needed

• Type of factory (Semi-D, detached, terrace, BTS)

• Tenure (Freehold vs Leasehold)

• Compliance (BOMBA, Local Council, utility readiness)

•  Budget for purchase or financing

Clarifying your needs helps your agent filter suitable listings efficiently.

 Step 2: Choose the Right Location

Key industrial zones to consider:

• Klang Valley – Pulau Indah, Bukit Raja, Rawang

• Penang – Batu Kawan, Prai, Bayan Lepas

• Johor – Senai, Nusajaya, Pasir Gudang

• Negeri Sembilan – Bandar Enstek, Nilai, Sepang

Each area has different strengths: proximity to ports, labor access, incentives, or zoning.

 Step 3: Appoint a Qualified Industrial Agent

Engage a licensed real estate negotiator (REN) or registered firm that specializes in industrial properties.

Benefits include:

• Verified listings

• Guidance on zoning, approvals, and valuations

• Connection with legal, engineering, and BOMBA consultants

• Handling the paperwork and negotiations professionally

Tip: Terra Group offers specialized services for factory buyers across Malaysia.

 Step 4: Perform Due Diligence

Before signing any agreement:

•  Check title and land use (industrial category)

•  Confirm BOMBA approvals, CF (Certificate of Fitness), or CCC

•  Verify accessibility for trailers and container trucks

• Review utility readiness (TNB, SYABAS, IWK, Telekom)

•  Inspect structural integrity and factory layout

Request an official land search from the relevant Land Office.

 Step 5: Sign the Offer to Purchase (OTP)

Once satisfied:

1. Sign the Offer to Purchase with terms & deposit (typically 2-3%)

2. Appoint a lawyer to draft the Sale & Purchase Agreement (SPA)

3. Ensure conditions like title transfer, vacant possession, and approval timelines are included

 Step 6: Complete Legal Documentation

Lawyer responsibilities:

• Draft & execute SPA

• Perform title search

• Lodge MOT (Memorandum of Transfer)

• Handle stamp duties and disbursements

 Completion time: usually 3–6 months, depending on the land type and state authority.

 Step 7: Final Handover & Operational Readiness

Upon full payment:

• Take vacant possession of the factory

• Conduct final inspection

• Transfer utility accounts

• Renovate or modify based on your operational needs

• Submit for BOMBA or business license if required

Your factory is now ready for occupancy or production.

 Bonus Tips for Investors:

• Look for tenanted factories to enjoy passive income

• Explore built-to-suit (BTS) options for specific operations

• Invest in areas with future infrastructure growth (e.g., WCE corridor)

• Prioritize ESG-compliant factories for long-term value