The business licence of Network School, the digital startup community founded by US investor Balaji Srinivasan in Malaysia, has been revoked, the chief minister of Johor state said on Tuesday.
This came after an investigation into alleged immigration law violations following claims by social media users that Israeli nationals were among participants at the startup school located in Forest City, Johor.
“The Johor state government takes note of and fully supports the decision of the special meeting of the Iskandar Puteri City Council (MBIP) to revoke the business license and order all activities of NS0 Malaysia Sdn. Bhd. (Network School) in Forest City to cease, effective July 22, 2026,” the chief minister of Johor state Onn Hafiz Ghazi said in a Facebook post on Tuesday.
“The state government wishes to emphasise that Johor always welcomes high-quality investments that benefit the economy, create job opportunities, and drive state development. However, no investor, company, or organisation may be placed above the sovereignty of the country’s laws,” he said.
The state government also urged the Ministry of Digital and the Malaysia Digital Economy Corporation (MDEC) to take appropriate action regarding the Malaysia Digital status or any recognition previously granted to the organization if there is any non-compliance with the established conditions or principles, he added.
The state government also urged all relevant agencies to tighten the ‘due diligence’ process, including background checks, ownership, funding sources, operational methods, and narratives brought by any company or organization.
In a post on Saturday (July 18), Srinivasan said Network School is not shutting down. “That’s fake news,” he wrote.
“We received two notices. The first tells us to change the text of a sign. The second says that our coworking site, which was created by joining two adjacent units, evidently has a valid license on the left hand side but not the right hand side,” he wrote in the post on X.
“We have a remedial period for both issues, and will remediate them shortly. But our members are otherwise unaffected,” he added.
Last week, Srinivasan has requested a meeting with the office of Malaysia Prime Minister Anwar Ibrahim, days after immigration officers raided his startup school in Forest City, a sprawling $100-billion development on reclaimed land in Malaysia’s Johor state.
Malaysia’s immigration department carried out an inspection and found that members of the Network School had valid travel documents.
Meanwhile, in his earlier post “Should the global tech community continue investing in Malaysia” on X, he said at this point, all further investment they were planning to make in Malaysia is “on hold” until they get sufficient assurance that such issues won’t recur.
“So are the investment plans of many of our friends, including the execs and investors at global tech firms that we brought to Forest City. Because to put it very plainly: we have invested MYR100 million+ in Malaysia, while creating jobs for dozens of Malaysians, and our faces and names are known. Our Malaysian executives and employees deserve the benefit of the doubt over anonymous internet trolls,” he wrote in the post dated July 16.
“There are two paths forward. In the first case, if Malaysia still wants continued global tech investment, if it wants to be a top 20 tech hub, if it wants us to revitalize Forest City, then we request an audience with the Prime Minister’s office to discuss the terms of a memorandum of understanding between Network School and the Malaysian government, similar to the document recently signed between the Solana Foundation and the Kazakhstan government,” he wrote in the post.
Reuters reported that concerns have also been raised over Srinivasan’s mission, outlined in his 2022 book The Network State, to set up new decentralised communities separate from existing nation states, which some social media users said posed risks to Malaysia’s sovereignty.
Meanwhile on Wednesday, Srinivasan posted a video on X and announced that a memorandum of understanding has been signed between the Republic of Kazakhstan and Network School.
“Our new campus will become a haven for global techno-optimism, with expedited visas, streamlined redomiciliation, and active recruitment of talent,” he wrote in the post which has been pinned to his X account.
Local media New Straits Times reported on Wednesday that the Network School’s premises in Forest City has ceased operations.
A visit to the premises on Wednesday morning found a temporary closure notice pasted on the main entrance, while the Network School signboard previously displayed on the building had been removed.
Several security guards were seen remaining inside the compound to monitor the premises, according to the report.
MDEC is taking immediate steps to revoke the Malaysia Digital status of NSO Malaysia Sdn Bhd, national news agency Bernama reported on Wednesday.
MDEC said in a statement on Tuesday that the action follows the city council’s decision to revoke NSO’s business licence, the report added.
Conditions attached to the Malaysia Digital status require that a company obtain the relevant permits and licences to carry out its approved activities, and to comply with all applicable regulations and licensing requirements, MDEC said.
“The revocation of NSO’s business licence constitutes a breach of this requirement,” the agency added.
According to a previous post on X, Srinivasan is the former chief technology officer of cryptocurrency exchange Coinbase and a former general partner at Silicon Valley venture capital firm Andreessen Horowitz.
Srinivasan launched Network School in Malaysia in October 2024, citing what he described as the country’s pro-technology policies.
In his post, he pointed to national initiatives such as the KL20 initiative — which aims to position Malaysia as a top-20 global tech hub — alongside MDEC digital nomad visas and Malaysia My Second Home (MM2H) investor visa programs, and the Johor-Singapore Special Economic Zone.
“When taken in combination with Malaysia’s data center buildout and its policy of welcoming visa-free visits for 98 percent of the world, it seemed like Malaysia might be a great place to build a global tech hub that was simultaneously inexpensive and easy to visit (especially for non-Westerners),” Srinivasan wrote.
Network School describes itself on its website as a “frontier community for techno-optimists,” catering to remote workers, digital nomads, creators, and engineers. It offers what it calls “society-as-a-service,” with membership starting at $1,500 per month for shared accommodations, meals, and gym access.
Featured photo credits: Balaji Srinivasan’s X account
US investor Srinivasan seeks meeting with Anwar’s office after startup school in Forest City raided