Quick answer: MDEC charges a non-refundable processing fee for each new Malaysia Digital (MD) status application. MDEC's guidelines do not state the amount and publish it on its website. The bigger commitment is what you must spend after approval: at least RM50,000 a year in operating expenditure on the MD activities, and at least two full-time knowledge workers on an average monthly base salary of RM5,000, which is at least RM120,000 a year in payroll at the minimum. Paid-up capital must be at least RM1,000.
- The MDEC processing fee is non-refundable and published on MDEC's website.
- You must spend at least RM50,000 a year on the MD activities.
- Two knowledge workers at RM5,000 average base salary means at least RM120,000 a year in payroll.
- Salaries count as operating expenditure, so payroll can cover the RM50,000 test.
- An independent external auditor, paid by the company, verifies the annual declaration.
What You Pay and What You Must Spend
| Item | Amount | Who it goes to |
|---|---|---|
| Application processing fee | Published on MDEC's website | MDEC, non-refundable |
| Paid-up capital | At least RM1,000 | Held in the company |
| Operating expenditure on MD activities | At least RM50,000 a year | Your own costs |
| Two knowledge workers | At least RM5,000 a month on average each | Your employees |
| External auditor for the annual declaration | Set by the auditor | Appointed and paid by the company |
The Minimum Payroll Maths
| Calculation | Result |
|---|---|
| 2 knowledge workers × RM5,000 a month | RM10,000 a month |
| RM10,000 × 12 months | RM120,000 a year |
| Minimum operating expenditure required | RM50,000 a year |
What Counts as Operating Expenditure
MDEC counts spending on items consumed in carrying out the MD activities, including salaries, utilities, rental, professional fees, administrative costs and marketing. Because salaries count, a company that pays two knowledge workers at the minimum will exceed the RM50,000 annual test through payroll alone. The expenditure must relate to the MD activities.
Other Costs to Budget For
| Cost | Why you will have it |
|---|---|
| Company incorporation | The company must be incorporated under the Companies Act 2016 before it can apply. |
| Professional fees | Preparing the business plan, financial plan and application. |
| Accounting and audit | Annual accounts and the independent auditor verification of the declaration. |
| Expatriate passes | MDEC and Immigration fees apply separately if you hire foreign knowledge workers. |
| Tax incentive application | A separate application with its own costs, if you pursue it. |
Not sure where you stand? WhatsApp us. We will check it before you apply.
Is It Worth the Cost?
MD status is a commitment to run a real operation: hire, spend and report every year. If your plan already includes two skilled hires and more than RM50,000 of annual spend on a qualifying activity, the incremental cost is mostly the application and the annual verification. If it does not, the cost is the commitment you would have to create.
Three Scenarios
Scenario 1. A software team of five employees on well above RM5,000 each already exceeds both the hiring and the spending test, so its extra cost is mainly the application and annual verification.
Scenario 2. A one-person start-up applies without any plan to hire. It must still find two full-time knowledge workers within 12 months or risk non-compliance.
Scenario 3. An overseas parent funds a Malaysian subsidiary with the RM1,000 minimum capital but plans real operating spend far above RM50,000. It meets the capital test and has room to meet the spend test.
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.
How much does it cost to apply for Malaysia Digital status?
MDEC charges a non-refundable processing fee for each new application. The guidelines do not state the amount, and MDEC publishes it on its website, so confirm the current figure there.
Is the MD status application fee refundable?
No. The processing fee is non-refundable.
Do I pay again if I reapply after a rejection?
Yes. A reapplication carries the processing fee again.
What is the minimum paid-up capital?
RM1,000, both to apply and to maintain at all times.
How much must I spend after approval?
At least RM50,000 a year in operating expenditure on the MD activities.
What counts as operating expenditure?
Salaries, utilities, rental, professional fees, administrative costs and marketing, where they relate to the MD activities.
What is the minimum payroll under the hiring condition?
Two full-time knowledge workers at an average of at least RM5,000 a month is at least RM10,000 a month, or RM120,000 a year.
Do salaries count towards the RM50,000?
Yes. Salaries count as operating expenditure.
Who pays the external auditor?
The company. The independent external auditor who verifies the annual declaration is appointed and paid for by the company.
Are there costs after approval?
Yes: the operating commitments, annual verification, accounting and any changes you must notify to MDEC.
Is the tax incentive included in the fee?
No. It is a separate application.
Do I pay MDEC for foreign worker passes?
Yes. MDEC and Immigration fees for expatriate passes are separate from the MD status application.
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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