Penang seeks federal commitment for proposed international financial centre

George Town, Penang: Penang is eagerly awaiting a firm commitment from the federal government to establish the proposed Penang International Financial Centre (PIFC) in its 2027 Budget. Chief Minister Chow Kon Yeow revealed that the state is actively preparing for discussions with the Finance Ministry and other relevant agencies, with a White Paper being drafted as the basis for these conversations.

A task force was formed earlier this year, and a consultant has been appointed, with the completion of the White Paper expected to be the next major milestone before the proposal is submitted for consideration. Chow expressed hope that the federal government would at least acknowledge the proposal in the 2027 Budget, and ideally approve it.

He clarified that PIFC would not compete with financial centers in Kuala Lumpur or Labuan, or the Johor Special Economic Zone (SEZ), but rather leverage Penang's strengths as a technology and semiconductor hub. The proposed center aims to provide financing support for the expansion of technology companies and the semiconductor industry, especially in light of the rapid growth of artificial intelligence, geopolitical shifts, and the semiconductor boom, which are driving up demand for financing in these sectors.

Meanwhile, Securities Commission Malaysia (SC) chairman Datuk Mohammad Faiz Azmi stated that the SC's mandate does not include deciding on the establishment of the financial center, with that decision falling under the Finance Ministry's purview. The SC, however, would share its views during the government's deliberations. The proposed PIFC is expected to offer access to venture capital, private equity, cross-border investment networks, and capital market expertise, aiming to attract capital inflows, bolster the technology ecosystem, and provide local businesses with improved access to funding and advisory support for innovation, international expansion, and eventual public listing.