Quick answer: A business is eligible for Malaysia Digital (MD) status if it is incorporated under the Companies Act 2016 and resident in Malaysia, proposes or carries out an activity within one of MDEC's MD activity areas, and has at least RM1,000 paid-up capital. The activity is what decides most cases: developing or providing technology in areas such as AI, big data, cybersecurity, cloud, fintech and creative media qualifies, while trading, staffing, marketing, training and traditional web design do not.
- Three entry tests: incorporation and residence, an MD activity, RM1,000 paid-up capital.
- The activity is what decides most cases.
- Developing or providing technology in an MD area qualifies. Reselling, staffing, marketing and training do not.
- Activities not named, such as general software, SaaS or e-commerce, depend on mapping to an area, so confirm with MDEC.
- Eligibility to apply is not the same as being able to meet the 12-month conditions.
The Three Entry Tests
| Test | Pass if |
|---|---|
| Company | Incorporated under the Companies Act 2016 and resident in Malaysia |
| Activity | Proposes or carries out at least one MD activity |
| Capital | Paid-up capital of at least RM1,000 |
Where Your Business Probably Stands
| Your business | Likely position | Why |
|---|---|---|
| Builds an AI or machine learning product | Likely eligible | AI is an MD activity area |
| Analyses large datasets as a service | Likely eligible | Big data analytics is an MD activity area |
| Provides cybersecurity technology or support | Likely eligible | Cybersecurity is an MD activity area |
| Runs cloud-based applications on cloud infrastructure | Likely eligible | Cloud computing includes cloud-based applications |
| Develops games, animation or visual effects | Likely eligible | Creative media technology is an MD activity area |
| General software or SaaS not tied to a named area | Needs checking | The guidelines do not name general software, so map it to an area and confirm with MDEC |
| E-commerce store selling products | Unlikely | Trading and retailing are excluded |
| Digital marketing agency | Unlikely | Advertising, marketing and promotion are excluded |
| IT staffing or training | Not eligible | Staffing, staff augmentation, training and consultancy are excluded |
Eligible to Apply Is Not the Same as Ready
The three entry tests only get you to the application. Once you hold MD status you must, within 12 months, operate in Malaysia, employ at least two full-time knowledge workers at RM5,000 average base salary on the MD activities, and spend at least RM50,000 a year on them. Check you can meet these before you apply.
Your Self-Check
- We are, or will be, incorporated under the Companies Act 2016 and resident in Malaysia.
- Our activity matches an MD activity area.
- We are not reselling hardware or software, and our core is not staffing, marketing or training.
- We will perform the core work ourselves.
- We can employ two knowledge workers at RM5,000 average base salary within 12 months.
- We expect at least RM50,000 a year of spend on the MD activities.
Not sure where you stand? WhatsApp us. We will check it before you apply.
If You Are on the Boundary
| Situation | What to do |
|---|---|
| Activity could fit two areas | Describe the technology you build or provide, not the market you serve. |
| Activity looks like a non-qualifying one | Check whether the core is technology development, which may qualify, or a service on the exclusion list. |
| Not named in the guidelines | Write to MDEC at [email protected] before you invest in the application. |
Three Scenarios
Scenario 1. A company builds a computer vision product for factories. It fits AI, is incorporated and has RM1,000 capital. It is eligible to apply.
Scenario 2. An online shop sells gadgets. Retailing is excluded, so it is not eligible even though it runs on a website.
Scenario 3. A software house builds custom business applications. General software is not named, so it maps its work to a named area, such as cloud or systems architecture, and confirms with MDEC.
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.
Is my business eligible for Malaysia Digital status?
If it is incorporated under the Companies Act 2016 and resident in Malaysia, has at least RM1,000 paid-up capital and carries out an MD activity, yes. The activity decides most cases.
What are the eligibility criteria for MD status?
Incorporation under the Companies Act 2016 and residence in Malaysia, an MD activity, and RM1,000 paid-up capital.
Which businesses qualify?
Those that develop or provide technology in an MD area such as AI, big data, fintech, cybersecurity, cloud, blockchain, creative media, robotics and global business services that are technical.
Which businesses do not qualify?
Those whose core is trading or leasing hardware or software, manufacturing, staffing, event management, advertising and marketing, training and consultancy or traditional web design.
Does a software company qualify?
The guidelines do not name general software, so a software company should map its work to a named area such as AI, cloud, cybersecurity or systems architecture and confirm with MDEC.
Does an e-commerce business qualify?
Retailing and trading are excluded. A technology platform business may map to a named area, but a business that simply sells goods online does not.
Do foreign-owned companies qualify?
Yes. MD status exempts companies from local ownership requirements. The company must still be incorporated in Malaysia.
Can a start-up qualify?
Yes, provided it can meet the 12-month conditions.
Do I need to be operating already?
No. The company can propose to carry out the MD activity.
Is there a minimum number of employees?
After approval, at least two full-time knowledge workers within 12 months.
How do I check an activity MDEC does not name?
Write to MDEC's Client Contact Centre at [email protected] before applying.
Can you assess my eligibility?
Yes. We test your activity, hiring plan and cost base against MDEC's conditions.
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.
Talk To Us Now
Thinking of applying for MD status? We will assess it first. All consultations are by video call.