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MD Status

Malaysia Digital Status Conditions and Reporting After Approval

What you must keep doing once MD status is awarded.


Quick answer: After Malaysia Digital (MD) status is awarded, a company must carry out the approved activities in Malaysia, employ at least two full-time knowledge workers at RM5,000 average base salary, spend at least RM50,000 a year on the MD activities, and keep paid-up capital at RM1,000 or more. It submits an annual Self-Declaration Form within seven months after each accounting period, verified by an independent external auditor, and must notify MDEC of changes in shareholding, name, product names and paid-up capital above the minimum.

Key takeaways

  • Operating conditions apply within 12 months of award and are then maintained.
  • The Self-Declaration Form is due within seven months after each accounting period ends.
  • An independent external auditor, paid by the company, verifies the information.
  • Notify MDEC of changes in shareholding, name, product names and capital above the minimum.
  • Non-compliance can lead to revocation and loss of related benefits.

Conditions You Keep Meeting

Condition Requirement
Paid-up capital At least RM1,000 at all times
Activity Carry out the approved MD activities in Malaysia, directly and without outsourcing core work
Knowledge workers At least 2 full-time, average RM5,000 monthly base salary
Spend At least RM50,000 a year on the MD activities
Laws and licences Comply with Malaysian laws and obtain all required permits and licences

The Annual Cycle

1

Close the accounting period

Finalise accounts and records.

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2

Prepare the declaration

Complete the Self-Declaration Form or other MDEC forms.

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3

External verification

An independent external auditor verifies the information.

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4

Submit within seven months

Submit after the accounting period ends.

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5

Respond to MDEC

MDEC can request SSM documents and audited accounts.


What You Must Tell MDEC

Change How
Paid-up capital above the minimum MDEC's forms with supporting documents
Equity or shareholding structure MDEC's forms with supporting documents
Company name and product or service names MDEC's forms with supporting documents
Operating address, contact persons and details Update on the MD platform
Other variations to approved conditions Approval Committee approval
Adding activities Written request, treated like a new application

If You Fall Short

MDEC makes the final decision on compliance. MD status can be revoked for non-compliance with the conditions, the Approval Committee sets the effective date, and related incentives and benefits are withdrawn. A company can surrender its status at any time if MDEC confirms there is no non-compliance.


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Annual Checklist

  • We still have at least RM1,000 paid-up capital.
  • Two knowledge workers remain employed at the required average salary.
  • Spend on MD activities reached at least RM50,000.
  • We carried out the approved activities ourselves.
  • The Self-Declaration Form is prepared and verified by an external auditor.
  • Any changes in shareholding, name or capital were notified.
  • Our licences and permits are current.

Mistakes

⚠️

Missing the seven-month deadline

File the declaration on time.

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Unrecorded changes

Shareholding and name changes must be notified.

⚠️

Spending outside MD activities

Only MD activity spend counts.

⚠️

Assuming status is permanent regardless

It is perpetual only while conditions are met.


Three Scenarios

Scenario 1. A company files its declaration within seven months with auditor verification. It stays compliant.

Scenario 2. A company changes its shareholding and forgets to notify MDEC. It must notify through MDEC's forms.

Scenario 3. A company's headcount falls to one knowledge worker. It risks non-compliance.


How We Help

What we handle for you

Before you apply

  • Test your activity, hiring plan and cost base against MDEC's conditions.
  • Advise whether MD status, a tax incentive or both make sense for your business.
  • Prepare your business plan and financial plan based on your company idea or business model.

Application

  • Prepare and submit the application and answer MDEC's questions.

Why companies choose us

End-to-end under one roof

  • We handle company incorporation, accounting and payroll, as well as MD status and expatriate pass applications, so your structure, records and hiring plan stay aligned.
  • The company is set up correctly from day one.

We check before you invest

  • We confirm eligibility, including whether you can hire the expatriates you need, before a foreign investor decides to incorporate in Malaysia.
  • Neutral Consulting PLT is a Kuala Lumpur firm led by a Managing Partner who is a member of the Malaysian Institute of Accountants.

Frequently Asked Questions

Quick answers.

What conditions apply after MD status approval?

Carry out the approved activities in Malaysia, employ two full-time knowledge workers at RM5,000 average base salary, spend at least RM50,000 a year on MD activities and keep RM1,000 paid-up capital.

What is the Self-Declaration Form?

An annual form submitted to MDEC within seven months after each accounting period ends.

Who verifies the declaration?

An independent external auditor appointed and paid for by the company.

What can MDEC ask for?

SSM documents and annual audited accounts.

What changes must I notify?

Changes in paid-up capital above the minimum, shareholding or equity, company name and product or service names.

What changes go on the MD platform?

Operating address, contact persons and contact details.

Can I add activities?

Yes, by a formal written request that follows the same process as a new application.

Can MD status be revoked?

Yes, for non-compliance. Related incentives and benefits are withdrawn.

Can I surrender MD status?

Yes, at any time, if MDEC confirms there is no non-compliance.

Does MD status expire?

No fixed expiry. It is perpetual while the approved conditions continue to be met.

Who decides on compliance?

MDEC makes the final decision.

Can you manage the annual declaration?

Please ask us about our scope. We can advise on the conditions and records you need to keep.



Sources

Official sources

This page is general information, not legal advice. Agencies change their requirements, so confirm the current rules with MDEC, or with us, before you act. Checked November 2026.


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