Malaysia has shut the Forest City campus of Network School, the live-in startup community founded by Indian-origin technology entrepreneur Balaji Srinivasan. The Iskandar Puteri City Council revoked the business licence of operator NS0 Malaysia Sdn. Bhd. on July 21, 2026, and ordered all activities at its Johor premises to stop from July 22. Enforcement officers later sealed part of the site and displayed an official closure notice.

The decision matters beyond one co-working campus. The project was presented as an early physical version of Srinivasan’s “network state” vision, in which online communities establish real-world settlements and may eventually seek wider legal or political recognition.

Why Network School Faced Action in Forest City

Johor Chief Minister Onn Hafiz Ghazi said the state government supported the council’s decision to revoke the operator’s licence and stop its activities. He said the council acted after reviewing inspection reports, enforcement findings and representations submitted by the company. The official Johor statement added that action was taken after complaints were verified, inspections were conducted and non-compliance was identified.

The final order required Network School to cease operations immediately from July 22. Local reports said the organisation’s activities differed significantly from those permitted under its office-use licence. The council also found breaches involving the use of its premises and licensing conditions.

What the Earlier Notices Said

Before the final revocation, Srinivasan said the organisation had received two narrower notices. He said one notice concerned the wording displayed on a sign. The other involved a co-working site created by joining two neighbouring units. According to his account, one side had a valid office licence while the other did not. He said the organisation had been given time to correct both issues. However, that statement was issued on July 18. Three days later, the council held a special meeting and cancelled the operator’s business licence. The earlier claim about a remedial period should therefore not be treated as the company’s response to the final shutdown. The final council decision replaced the earlier position that operations could continue while the problems were corrected.

Was the Closure Connected to Israeli Participants?

The licensing action followed a broader controversy involving claims that Israeli citizens had attended the programme using passports issued by other countries.

Malaysia does not maintain diplomatic relations with Israel and generally requires Israeli passport holders to obtain special permission before entering the country. The allegations prompted scrutiny from the Home Ministry and immigration authorities.

However, authorities inspected the documents of 266 foreign participants from 40 countries and said the travel documents examined were valid. Reports stated that investigators had not found evidence of travel-document offences at that stage. It is therefore important to separate the two issues. The allegations involving Israeli participants triggered wider government attention, but the municipal closure order was based on licensing conditions, premises use and other regulatory findings. It was not a public finding that the organisation had illegally brought Israeli citizens into Malaysia.

What Was the Forest City Project?

The campus launched in Malaysia in 2024 as a residential programme for founders, remote workers, digital nomads and families. Its official website describes the project as a community where members learn skills, work remotely, exercise and build relationships. Accommodation, meals, gym facilities and round-the-clock co-working spaces were included in the model.

The startup community began with a 90-day programme involving more than 100 participants. It later expanded into longer stays and additional cohorts. The organisation says it has served more than 2,000 members since its creation. Balaji Srinivasan, a former Coinbase chief technology officer and the author of The Network State, viewed the project as a way to turn online groups into physical “startup societies.” The broader school network was intended to connect technology, remote work, shared living and community-building.

What the Wall Street Journal Reported

The Wall Street Journal described the Forest City operation as part technology incubator and part self-improvement retreat. It reported that members lived and worked together, used co-working facilities and followed programmes involving fitness, nutrition and entrepreneurship. The report also described complaints from some former participants about accommodation, limited nightlife and the gender balance.

Srinivasan disputed parts of that account. He said mildew was a common regional maintenance issue that the organisation addressed, argued that participants joined for learning and self-improvement rather than nightlife, and rejected the suggestion that the community lacked women and families. The Wall Street Journal also reported that the project had attracted a few hundred participants at a time. Separate reporting identified members from countries including Russia, Canada and India, showing that the campus had developed an international membership before its closure.

Why the Shutdown Matters

The case demonstrates the difference between promoting a global technology vision and operating a physical organisation within a country’s existing laws. The project may have been designed around digital membership, remote work and voluntary community participation, but its buildings, signs, business activities and immigration arrangements remained subject to Malaysian regulation.

For the startup community, the immediate consequence was disruption. Members told CNA that they had received little notice, had to change travel plans and were preparing to return home or move elsewhere. The premises were emptied, signs were removed and the co-working space was sealed. The wider lesson is not that online communities cannot develop physical campuses. It is that such campuses must still comply with local licensing, land-use, immigration and business rules.

The Move to Kazakhstan

The next step is no longer entirely uncertain. Within hours of the Johor decision, Balaji Srinivasan said Network School would establish a new campus in Kazakhstan. He announced that an agreement had been signed with representatives of the Central Asian country and described the planned site as a centre for global technology talent.

Some former Johor members were reportedly considering relocating there, while others planned to return home or continue working independently in Malaysia.

No confirmed reopening date for the Forest City site has been announced. The Malaysia operation is closed under the council’s order, while the Kazakhstan plan represents the project’s publicly stated direction. Whether this school network can establish a durable campus elsewhere will be the next test of Srinivasan’s wider vision. The Johor episode has already shown that even an ambitious experiment in digital-first communities must satisfy the ordinary laws of the country in which it operates.