As a company operating in Malaysia, being recognised with Malaysia Digital Status brings about many benefits. Amongst others, MD Status companies enjoy a range of incentives and support that promotes their business growth aligned to MDEC’s goal of driving the digital economy.
If you’re currently considering your Malaysia Digital application, find out further if you’re eligible as well as conditions to fulfil upon getting awarded the status below.
To be eligible to apply for the award of Malaysia Digital Status, a company is required to meet the following criteria:
- Incorporated under the Companies Act 2016 and resident in Malaysia
- Proposing to carry out or is currently carrying out one or more of the Malaysia Digital activities.
Malaysia Digital Approved Activities
In line with MDEC’s vision for Malaysia to be a major global ICT hub, the list of approved activities fall within research, development and commercialization of tech solutions and/or services as follows:
- big data analytics (BDA);
- artificial intelligence (AI);
- financial technology (Fintech);
- internet of things (IoT);
- cybersecurity (technology/software/design and support);
- data centre and cloud;
- creative media technology;
- sharing economy platform;
- user interface and user experience (UI/UX);
- integrated circuit (IC) design and embedded software;
- 3D printing (technology/software/design and support);
- robotics (technology/software/design);
- autonomous technologies;
- systems/network architecture design and support;
- global business services or knowledge process outsourcing;
- virtual, augmented and/or extended reality;
- drone technology;
- advance telecommunication technology;or
- other emerging technologies deemed significant for the digital ecosystem subject to approval by the Approval Committee.
Conditions of New Malaysia Digital Status
As a newly awarded Malaysia Digital company, there are a few conditions you’re required to satisfy.
Source: MDEC, Guidelines on Malaysia Digital Status
Conditions for Malaysia Digital Status with Tax Incentives
If your company is gunning for tax incentivized application, you’ll have to fulfill additional criterias, namely:
- Has not issued any invoice in relation to the core income generating activities in Malaysia on the date the application for the award of the MSC Malaysia Status is made;
(Example – A company which has issued an invoice may be eligible if it has at least 60% Malaysian equity ownership and has issued its first invoice for such core income generating activities in Malaysia not more than 12 months prior to the date of application.);
- Not granted by the Government of Malaysia tax exemption in respect of the income from any activity on the date of application.
You’ll also need to adhere to several personnel and financial terms. Do note the requirements differ based on your preferred tiers as well as the timeline.
Source: MDEC, Guidelines On MSC Malaysia Financial Incentives
What is the Definition of a Knowledge Worker?
A “knowledge worker” is an individual who holds one of the following:
• Tertiary qualification from an institution of higher learning (in any field); or
• Diploma in ICT, engineering, technology or specialized certification plus at least 2 years’ relevant experience in a field that is a heavy user of technology; or
• Professional, executive, management and technical work categories in information technology enabled services eg. Information Technology / IS Professionals, Finance / Accounting, Business Administration, Engineering, Medical, Legal,
and also includes:
• foreign workers with knowledge-based skills that are not prevalent in Malaysia and required by MD Status companies.
• workers who are utilized for their creative talent to produce value-added creative work for MD Status companies.
Apply for Malaysia Digital Status in 4 Steps
Now that you’ve checked off everything you need to proceed with your company’s application, the final step is to actually apply and the steps are summarized as below:
Step 1 – Application Submission by Applicant
Step 2 – Application Acceptance
MDEC conducts a preliminary check on your application’s tax incentive eligibility. Updates will be communicated via email.
Step 3 – Evaluation & Assessment
An MDEC Business Analyst will evaluate your application at this stage. Be prepared to provide further additional information to support your application if deemed necessary by MDEC. You’ll also need to pay a processing fee amount subject to your status of choice.
Step 4 – Application Submission to Committees
The application will be submitted for a final decision (approval / rejection) to either the Malaysian Digital – Coordination Committee (MD-CC) or the National Committee on Investment (NCI) depending on whether you’ve opted for a tax incentivised status
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