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The island was renamed the Prince of Wales Island after the heir to the British throne, while the new settlement of George Town was established in honour of King George III.

Thus, George Town became the first British settlement in Southeast Asia and a springboard for future British territorial expansion in the region, while its establishment by the British East India Company marked the start of a period of British imperialism in the Malay Peninsula.

The State of Penang, one of the most developed and urbanised Malaysian states, is located at the nation's northwest coast along the Malacca Strait.

Unlike most Malaysian states, the history of modern Penang was shaped by British colonialism, beginning with the acquisition of Penang Island from the Sultanate of Kedah by the British East India Company in 1786.

Moreover, the state enjoys one of the lowest unemployment rates and Gini coefficients within Malaysia, as well as the second highest gross domestic product (GDP) per capita within the country after Kuala Lumpur.

The Sultan's force was also assisted by a fleet of pirates.

He also made the case that, with the other ports in the region, such as Aceh and Phuket, riddled with piracy and despotic governments, the British East India Company could seize the opportunity to establish a tranquil harbour on Penang Island conducive for free trade, noting that if "Malay, Bugis and Chinese will come to reside here, it will become the Exchange of the East if not loaded with impositions and restrictions".

Faced with the Dutch dominance of the East Indies (now Indonesia) and a growing French threat, Light, who by then had risen to the rank of Captain, was ordered to acquire Penang Island from Kedah.

At the time, Ming Emperor Yongle was in the midst of launching naval expeditions that would eventually reach all the way to eastern Africa.

The island, known as Bīnláng Yù (simplified Chinese: ), was mapped by Admiral Zheng He's fleet in the 'Nautical Charts of Zheng He'.

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