Within an overarching strategy for improving the investment environment, investment promotion and facilitation can help to increase both domestic and foreign investment and to enhance their contribution to national economic development. Success in promoting investment requires a careful calculation of how to employ resources most effectively and how to organise investment promotion activities within the government so that the overriding goal of economic development through improvements in the investment climate remains at the forefront of policymaking. Investment promotion and facilitation measures, including incentives, can be effective instruments to attract investments provided they aim to correct for market failures and are developed in a way that can leverage the strengths of a country’s investment environment. This chapter describes the various steps Malaysia has taken to reduce red tape and integrate the role of business in its development strategies. Particular attention is paid to dedicated measures to improve government efficiency for business, as well as to its investment promotion efforts and how they have become a global reference. The analysis draws out some lessons learned from Malaysia’s experience with industrial clusters and business linkages, which are at the core of the Malaysia’s private sector development strategy. Malaysia’s challenge in achieving Vision 2020 also entails addressing a skills-mismatch to meet the demands of a high-end technology and knowledge based economy, and this chapter highlights some areas for improvement in this regard.