Qatar and Malaysia have announced a US$2 billion (Dh7.34bn) joint investment fund.
Speaking in Putrajaya, near Kuala Lumpur, Najib Razak, the Malaysian prime minister, said the fund would target opportunities in both countries and neighbouring states.
"The prime minister of Qatar and I have agreed to work to set up a Malaysia and Qatar investment fund with each country to set up $1bn to look for investments," Mr Najib told Reuters.
The fund was a show of trust between two Muslim countries, said Sheikh Hamad bin Jassim bin Jabr Al Thani, Qatar's prime minister and foreign affairs minister, on his first day of a tour of Malaysia.
"Both countries are very close Muslim nations and we are also very close in our mind on how we can develop relations between both countries, this shows that we will do all that we can to develop relations between Qatar and Malaysia," he told Bernama, the Malaysian national news agency.
"The two countries' prime ministers witnessed the signing of letters of intent on cooperation agreements in the fields of tourism and higher education," Qatar News Agency reported.
Qatar has been a big investor in Malaysia in recent years.
The move follows an agreement signed by Qatar Investment Authority (QIA) with 1Malaysia Development Berhad, a government-owned strategic development company, in May last year, with the QIA seeking up to $5bn in investments.
Trade between the two nations has been steadily increasing and has grown from 250.6 million ringgit (Dh293.6m) in 2000 to 3.3bn ringgit this year, according to Malaysian government statistics.
While Qatar has traditionally invested in developed markets such as the UK and Switzerland, the tiny Gulf state has turned its attention towards investment in Asia.
Qatar Holding, an arm of the Qatar Investment Authority, was one of the largest investors in the initial public offering of Agricultural Bank of China last year, buying 22.1 per cent of the bank's shares in the world's biggest public float.