Quick answer: Malaysia Digital (MD) status requires at least two full-time knowledge workers employed for the MD approved activities, at a minimum average monthly base salary of RM5,000, within 12 months of award. A knowledge worker is a person with a tertiary qualification, an ICT, engineering or technology diploma or specialised certification plus at least two years' experience, or a professional, executive, management or technical role in technology-enabled services. MDEC's MD status guidelines do not set a local-employee quota or ratio.
- At least two full-time knowledge workers within 12 months of award.
- Average monthly base salary of at least RM5,000, employed for the MD activities.
- The guidelines do not specify a local staff quota or ratio.
- Foreign knowledge workers can count, and MD status gives access to a foreign knowledge worker quota.
- Staff must be employees of the company, not outsourced.
The Hiring Condition
| Element | Requirement |
|---|---|
| Number | At least 2 full-time knowledge workers |
| Salary | Minimum average monthly base salary of RM5,000 |
| Role | Employed for the MD approved activities |
| Deadline | Within 12 months of the date of award, then maintained |
Who Counts
Counts as a knowledge worker
By qualification
- A tertiary qualification from a higher learning institution, in any field.
- An ICT, engineering or technology diploma or specialised certification, plus at least two years of relevant experience in a technology-heavy field.
By role
- A professional, executive, management or technical role in technology-enabled services such as IT, finance, engineering, medical or legal work.
- Foreign workers with scarce knowledge-based skills, and creative talent producing value-added work.
What the Guidelines Do Not Say
| Question | Position |
|---|---|
| Is there a local staff quota? | Not specified in the MD status guidelines |
| Is there a required ratio of local to foreign staff? | Not specified |
| Can a founder on payroll count? | Not spelled out. Confirm with MDEC |
| Do part-time staff count? | The condition is for full-time employees |
Hiring Foreign Knowledge Workers
MD status gives access to a foreign knowledge worker quota and passes, but each hire is a separate application with its own approvals. The Employment Pass salary categories, headcount approval and other rules apply to every application.
Not sure where you stand? WhatsApp us. We will check it before you apply.
Checklist
- We have defined two roles on the MD activities.
- Each role meets the knowledge worker definition.
- Average base salary will be at least RM5,000 a month.
- Staff are full-time employees of our company.
- We have a job scope for each key role in case MDEC asks.
- We have a hiring timeline that fits the 12-month window.
Mistakes
Counting contractors
The condition is for full-time employees.
Hiring for non-MD work
Roles must be on the MD activities.
Salary below the line
Average base salary must reach RM5,000.
Leaving hiring to month 12
Plan recruitment early.
Three Scenarios
Scenario 1. A company hires two engineers at RM6,000 each on its AI product. It meets the hiring condition.
Scenario 2. A company hires one engineer and one part-time analyst. It does not yet meet the condition.
Scenario 3. A company outsources its development team to a vendor. Those workers are not its employees.
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 many employees does Malaysia Digital status require?
At least two full-time knowledge workers on the MD approved activities within 12 months of award.
What salary must they earn?
A minimum average monthly base salary of RM5,000.
Is there a local employee quota?
The MD status guidelines do not specify one.
Can foreigners count as knowledge workers?
Yes. The definition covers foreign workers with scarce knowledge-based skills.
Who is a knowledge worker?
A person with a tertiary qualification, an ICT, engineering or technology diploma or specialised certification plus two years' experience, or a professional, executive, management or technical role in technology-enabled services.
Can founders count?
The guidelines do not spell this out, so confirm with MDEC.
Do part-time staff count?
The condition is for full-time employees.
Do outsourced workers count?
No. They must be the company's employees.
When must I meet the condition?
Within 12 months of the date of award.
Do I need approval for foreign hires?
Yes. Each foreign hire needs its own pass application.
What if I fall short?
Non-compliance with conditions can lead to revocation of MD status.
Can you plan my hiring?
Yes. We plan roles and salaries against MDEC's conditions and the expat pass rules.
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
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