Ethnic Minangkabaus from Sumatra had founded a settlement on Penang Island in the early eighteenth century.

Haji Muhammad Salleh, known as Nakhoda Intan, anchored at Batu Uban and built a seaside settlement in 1734.

Later, the Arabs arrived and settled mainly at Jelutong.

The Arabs then intermarried with the Minangkabau; this gave rise to the Arab-Minangkabau admixture now described as Malay, as they have assimilated into the local Malay community.

The modern history of Penang begins in 1786.

On July 17 of this year, Captain Francis Light, an English trader-adventurer of the British East India Company, lands on Penang Island, at this time part of Kedah.

Fort Cornwallis will later be built at the site where he first set foot.

For Light, Penang Island, situated in the middle of the maritime trade route along the Malacca Straits between China and India, is a an ideal trading location from which to curtail French and Dutch territorial expansion in Southeast Asia.

The British East India Company is also seeking a naval base in the region for the maintenance of Royal Navy ships.

Meanwhile, Kedah is facing threats from its stronger northern rivals, Siam and Burma.

Thus, Light endeavors to negotiate with Sultan Abdullah Mukarram Shah of Kedah regarding the cession of Penang Island to the British East India Company, in exchange for military assistance against Kedah's foes.