(Bloomberg) -- Malaysia’s Khazanah Nasional Bhd. and two other funds will invest up to 3 billion ringgit ($627 million) in startups in Southeast Asia. 

Local pension fund Kumpulan Wang Persaraan Diperbadankan, or KWAP, and Blue Chip Venture Capital will be part of the initiative, according to Prime Minister Anwar Ibrahim.

Malaysia is also offering incentives to global tech firms setting up shop in the country, including office space subsidies and visa exemptions. Arm Holdings PLC and OCI Holdings were among companies that signed letters of intent to invest in the Southeast Asian country.

It’s “imperative for us to re-strategize and provide the best ecosystem to gain competitive advantage in attracting high-value investments,” Anwar said at the KL20 Summit in Kuala Lumpur.

The moves make up part of Malaysia’s efforts to transform the local startup ecosystem to be among the top 20 hubs globally. It also aims to create a more vibrant VC funding scene by doubling funds to $1.4 billion by 2030. 

Twelve global VC firms will be setting up offices in Malaysia, according to Anwar. 

Funds committed to venture capital and private equity in Malaysia grew to 17.6 billion ringgit last year from 3.3 billion ringgit in 2006, according to data from the Securities Commission. That’s only a fraction of the almost 1 trillion ringgit in combined assets in the nation’s fund management industry.

The global private capital industry is sitting on an unprecedented $4 trillion in funds, said Economic Minister Rafizi Ramli, citing data from Bain & Co., and this would offer the country plenty of opportunities to tap into. 

Malaysia must be well-positioned to capture the impending second wave of capital into Southeast Asia, he said, noting that efforts to boost startups in the country will also bolster listings in Kuala Lumpur.

Meanwhile, KWAP is putting more money into startups and venture capital to boost its returns, said Chief Executive Officer Nik Amlizan Mohamed.

--With assistance from Kok Leong Chan and Gao Yuan.

(Corrects details of initiative in first and second paragraphs in story first published on April 22)

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