Balaji Srinivasan has never lacked for big ideas. The former Coinbase CTO and Andreessen Horowitz General Partner has spent years evangelising the “network state”, a borderless, internet-native community that eventually negotiates diplomatic recognition from existing governments.
In late 2024, that theory got a physical address: Network School, a pop-up village of founders, engineers, and crypto enthusiasts housed inside the half-empty towers of Forest City in Johor, Malaysia.
Also Read: Six practical tips on how to become a digital nomad
Nine months later, Malaysian authorities tightened the valve considerably. Immigration officials began scrutinising the visa status of participants, several of whom were reportedly operating on tourist or social visit passes rather than legitimate work or student permits. Attendees describe increased checks, warnings, and mounting uncertainty over whether the programme can legally continue as advertised.
For a region that has spent a decade courting digital nomads and “future of work” narratives, the crackdown poses an uncomfortable question: was this inevitable, or did Malaysia fumble an opportunity?
A school that wasn’t quite a school
Part of the problem is definitional. Network School was never registered as an accredited institution, nor did it fit Malaysia’s existing frameworks for co-working visas, MM2H, or the DE Rantau digital nomad pass. It was designed to be something new — part co-living space, part ideological experiment, part unofficial curriculum on governance and technology.
That ambiguity is the entire point of a network state: operate in the gaps between existing legal categories until enough legitimacy accrues to demand its own. But immigration officers do not deal in theory. They deal in passport stamps and one blunt question: is this person working, studying, or just visiting? When hundreds cycle through a facility for months at a stretch, ambiguity stops being clever. It becomes a compliance risk.
Seen this way, the crackdown isn’t hostility to innovation. It is a government enforcing the line between visitor and resident, a line every country, Singapore included, guards jealously.
The bigger tension: Ideology meets sovereignty
Still, something here deserved better handling. Forest City, the ghost-town mega-development built by China’s Country Garden, has been desperate for any sign of life since its US$100-billion vision collapsed under oversupply and bad geopolitical timing. Whatever one thinks of its ideology, Network School brought paying occupants and foreign attention into towers that had sat empty for years. A calibrated response — clear guidance, a bespoke visa category, a formal MOU — could have captured the upside while closing the compliance gap.
Instead, ambiguity was left to fester until it became an enforcement story instead of a policy one. That is a familiar Southeast Asian pattern: digital nomad experiments get welcomed in speeches, while the bureaucratic plumbing to support them lags years behind the marketing.
There is a sharper ideological discomfort too. Network State philosophy, at its most provocative, imagines communities that eventually seek sovereignty or special jurisdiction, a proposition no nation-state, least of all one still nursing a foreign-funded property collapse on its own soil, should wave through without scrutiny. Malaysia is right to ask who governs Johor’s newest experiment, and under whose laws.
A middle path still exists
None of this means the door should close for good. Johor’s ambitions, anchored by the Johor-Singapore Special Economic Zone, depend on attracting exactly the kind of mobile, high-value talent Network School claims to cluster. The lesson isn’t that experimental communities are dangerous. It’s that experiments need a legal home to grow into, not just a rented tower and a manifesto.
Also Read: SPUN raises US$1.8M to fix SEA’s broken visa infrastructure
For founders and investors watching from Singapore, Jakarta, or Bengaluru, this episode is a reminder that Southeast Asia’s openness has limits, defined by sovereignty, labour law, and public accountability. The most interesting network states of the future won’t be the ones that dodge these questions. They’ll be the ones that answer them well enough to earn a seat at the table. Johor still has time to write that invitation. It would be a shame if bureaucratic inertia, not genuine disagreement, was the reason it never got sent.
The post Southeast Asia loves digital nomads until the paperwork gets complicated appeared first on e27.