Malaysia adopted an open policy regarding to the industrial property investment where expatriates invest their money in this country. However, there are some restrictions imposed to expatriates such as foreigners could not own property except industrial property before the emendment of NLC in late 1989. In the context of industrial property, there is no restrictions since the independence of Malaysia, but their involvement is not obvious. The opposite situation emerged after 1986 where the foreign investments start flowing to Malaysia generally and Johore especially, eventually, appears as the largest group of investors after 1986. This dissertation focus on industrial property in Johore Bahru generally and Pasir Gudang Industrial Estate spesifically. From the announcement in Pasir Gudang since 1986. The thrusts of this study are the government's policy on direct foreign investment, investment incentives and relevant government's agents involved in industrial development. It is the purpose of this diddertation to highlight the factors that drive foreign investors to Pasir Gudang. Then the effect upon industrial property resulted from their involvement within the area of study its periphery. Problems faced by the investors and their suggestions in relation to industrial development would also be put forward.