MALAYSIA DIGITAL STATUS

The Government of Malaysia, through Malaysia Digital Economy Corporation (MDEC), awards MD Status to eligible companies that participate in and undertake any of the MD activities. The grant of MD Status entitles eligible companies to a set of incentives, rights and privileges from the Government of Malaysia, namely the MD Bill of Guarantees (BoGs), subject to necessary approvals, compliance of applicable conditions and applicable laws and regulations.

CONDITIONS OF MD STATUS

Conditions to be complied within 12 months from date of award of MD Status:

1. Activity

Commencement of operation and undertaking of the MD Approved Activities in Malaysia.   

2. Knowledge Workers

Minimum 2 full-time employees (comprising knowledge workers) with minimum average monthly base salary of Ringgit Malaysia Five Thousand (RM5,000.00), employed for the MD Approved Activities.      

3. Operating Expenditure

Minimum annual operating expenditure of Ringgit Malaysia Fifty Thousand (RM50,000.00) incurred for the MD Approved Activities.

4. Paid-up Capital

Minimum of Ringgit Malaysia One Thousand (RM1,000.00)

The MD Tax Incentive offers the following options:

1. New Investment Incentive

a. Reduced Tax Rate (RTR): 0% RTR on qualifying intellectual property (IP) income and 10% or 5% RTR on qualifying non-IP income for up to 10 years; or

b. Investment Tax Allowance (ITA): 60% or 100% of qualifying capital expenditure against up to 100% statutory income for up to 5 years.

2. Expansion Incentive

a. Reduced Tax Rate (RTR): 15% RTR on qualifying IP and non-IP incomes for up to 5 years; or

b. Investment Tax Allowance (ITA): 30% or 60% of qualifying capital expenditure against up to 100% statutory income for up to 5 years.

THE MD ACTIVITIES

Research, development and commercialization of solution and/or provision of services in relation to any of the following technologies or areas:

1. big data analytics (BDA);

2. artificial intelligence (AI);

3. financial technology (Fintech);

4. internet of things (IoT);

5. cybersecurity (technology/software/design and support);

6. data centre and cloud;

7. blockchain;

8. creative media technology;

9. sharing economy platform;

10. user interface and user experience (UI/UX);

11. integrated circuit (IC) design and embedded software;

12. 3D printing (technology/software/design and support);

13. robotics (technology/software/design);

14. autonomous technologies;

15. systems/network architecture design and support;

16. global business services or knowledge process outsourcing;

17. virtual, augmented and/or extended reality;

18. drone technology;

19. advance telecommunication technology; or

20. other emerging technologies deemed significant for the digital ecosystem subject to approval by the Approval Committee.