Quick answer: MDEC's guidelines list 12 activities that do not qualify as Malaysia Digital (MD) activities: trading, retailing and leasing hardware, software and accessories; manufacturing; semiconductor wafer or chip fabrication; telecommunication services; non-technical, low-value global business services such as basic call centres, data entry and recruitment process outsourcing; staffing and staff augmentation; event management; advertising, marketing and promotion; advertorial and publication; training and consultancy; traditional web design and development; and supply chain services to the cigarette, tobacco, alcohol and gambling industries.
- MDEC lists 12 non-qualifying activities.
- Buying, selling or leasing hardware and software is excluded. Developing it is not.
- Chip fabrication is excluded but IC design qualifies.
- Basic telecommunication services are excluded but advanced telecommunication technology qualifies.
- Technical global business services are not excluded. Low-value ones are.
The 12 Exclusions
| # | Excluded activity | Detail |
|---|---|---|
| 1 | Trading, retailing and leasing | Of hardware, software and computer accessories |
| 2 | Manufacturing | Of any kind |
| 3 | Semiconductor fabrication | Wafer or chip fabrication |
| 4 | Telecommunication services | Provision of telecommunication services |
| 5 | Low-value global business services | Non-technical work, low-value call centres, data entry, recruitment process outsourcing |
| 6 | Staffing and staff augmentation | |
| 7 | Event management | |
| 8 | Advertising, marketing and promotion | |
| 9 | Advertorial and publication | |
| 10 | Training and consultancy | |
| 11 | Traditional web design and development | The guidelines do not define 'traditional' |
| 12 | Supply chain services | To the cigarette, tobacco, alcohol and gambling industries |
The Qualifying Neighbour
| Excluded | Qualifying nearby activity |
|---|---|
| Reselling software | Developing your own software product in an MD area |
| Chip fabrication | IC design and embedded software |
| Telecommunication services | Advanced telecommunication technology such as 5G and SDN |
| Low-value global business services | Technical global business services and knowledge process outsourcing |
| Manufacturing 3D printed products | 3D printing technology, software, design and support |
The Boundaries That Cause Trouble
| Area | Why it is unclear | What to do |
|---|---|---|
| Web design and development | 'Traditional' is not defined | Describe the technology you build, and confirm with MDEC |
| Digital marketing technology | Marketing is excluded, but a technology product is not marketing itself | Position the product as a technology in an MD area |
| IT consulting | Consultancy is excluded | Show product or technology delivery, not advisory |
| Staff augmentation | Excluded outright | Do not structure the business around supplying staff |
Quick Test
- Our core revenue is from developing or providing technology, not reselling it.
- We are not mainly supplying staff.
- We are not mainly selling training or consultancy.
- We are not mainly selling advertising or marketing.
- Our global business services are technical, not basic call centre or data entry.
- We do not supply goods to the tobacco, alcohol or gambling industries.
Not sure where you stand? WhatsApp us. We will check it before you apply.
Three Scenarios
Scenario 1. A reseller of enterprise software wants MD status. Reselling is excluded, so it must change its model to develop a product of its own.
Scenario 2. A call centre handles basic customer queries. Low-value call-centre work is excluded.
Scenario 3. A company designs integrated circuits and has the chips made by a foundry. IC design qualifies, while the fabrication it outsources is excluded.
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.
Which activities do not qualify for Malaysia Digital status?
Trading, retailing and leasing hardware, software and accessories; manufacturing; chip fabrication; telecommunication services; low-value global business services; staffing and staff augmentation; event management; advertising, marketing and promotion; advertorial and publication; training and consultancy; traditional web design and development; and supply chain services to the tobacco, cigarette, alcohol and gambling industries.
Does software reselling qualify?
No. Trading, retailing and leasing software are excluded. Developing your own software in an MD area may qualify.
Does IT consulting qualify?
Training and consultancy are excluded. A company delivering technology products or services may qualify instead.
Does web design qualify?
Traditional web design and development is excluded. The guidelines do not define 'traditional', so confirm with MDEC.
Does digital marketing qualify?
Advertising, marketing and promotion are excluded.
Does staffing qualify?
No. Staffing and staff augmentation are excluded.
Do call centres qualify?
Low-value call-centre work is excluded. Technical global business services are not excluded.
Does IC design qualify?
Yes. IC design and embedded software are an MD activity. Chip fabrication is excluded.
Does telecommunications qualify?
Telecommunication services are excluded. Advanced telecommunication technology is a qualifying area.
Why are tobacco and alcohol supply chains excluded?
MDEC lists supply chain services to the cigarette, tobacco, alcohol and gambling industries as non-qualifying.
What if my activity is on the list but I also develop technology?
Describe and structure the technology activity separately, and confirm with MDEC that it qualifies.
Who can confirm whether my activity qualifies?
MDEC's Client Contact Centre at [email protected].
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.