Quick answer: Malaysia Digital (MD) status recognises data centre and cloud computing as an activity area. MDEC's guidelines describe three categories: data centre operators, hyperscalers (global cloud providers with at least 25 MW power requirement, a global data centre footprint and no co-location) and cloud service providers offering IaaS or PaaS. Cloud computing in the guidelines also includes cloud-based applications designed for, hosted and operated on cloud infrastructure, so a SaaS company may map there, but should confirm with MDEC.
- Data centre and cloud computing is a named MD activity area.
- Three recognised categories: data centre operator, hyperscaler, cloud service provider.
- Cloud computing includes cloud-based applications designed for and operated on cloud infrastructure.
- The guidelines do not name SaaS separately, so SaaS companies should confirm with MDEC.
- Reselling cloud or software licences is excluded.
The Three Categories
| Category | What MDEC describes |
|---|---|
| Data centre operator | Provides core infrastructure such as power, cooling, physical security and equipment space, including co-location |
| Hyperscaler | Global cloud provider of IaaS, PaaS or SaaS, with at least 25 MW power requirement, a global data centre footprint and no co-location services |
| Cloud service provider | Provides IaaS or PaaS |
Where SaaS Fits
The guidelines say cloud computing covers public, private, hybrid and multi-cloud models and includes cloud-based applications designed for, hosted and operated on cloud infrastructure. A SaaS product built and operated this way has a reasonable case under this area. Because SaaS is not named on its own, describe the product in the guidelines' own terms and confirm with MDEC at [email protected].
What Does Not Qualify
| Activity | Why |
|---|---|
| Reselling cloud or software licences | Trading, retailing and leasing are excluded |
| IT consultancy and training around cloud | Training and consultancy are excluded |
| Staff augmentation for cloud projects | Staffing and staff augmentation are excluded |
| Traditional web hosting sites built by an agency | Traditional web design and development is excluded |
Checklist for a SaaS Company
- The product is cloud-based and operated by our own company.
- We describe it in the terms of the data centre and cloud area.
- We are not reselling third-party licences as our main revenue.
- We can employ two full-time knowledge workers at RM5,000 average base salary.
- We expect at least RM50,000 a year of spend on the MD activities.
- We have asked MDEC to confirm borderline points.
Not sure where you stand? WhatsApp us. We will check it before you apply.
Mistakes
Calling it IT services
Services close to consultancy or staffing are excluded.
Reselling cloud as the core
Trading and leasing are excluded.
Assuming SaaS is automatically named
It is not named separately.
Outsourcing the operation
The company must perform the activities itself.
Three Scenarios
Scenario 1. A company runs its own cloud-native analytics platform. It maps to cloud computing and confirms with MDEC.
Scenario 2. A reseller of cloud subscriptions applies. Reselling is excluded.
Scenario 3. A company operates a co-location data centre. It maps to the data centre operator category.
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.
Does a SaaS company qualify for Malaysia Digital status?
It may, because cloud computing in MDEC's guidelines includes cloud-based applications designed for, hosted and operated on cloud infrastructure. SaaS is not named separately, so confirm with MDEC.
What cloud activities qualify?
Data centre operators, hyperscalers and cloud service providers offering IaaS or PaaS, and cloud-based applications.
What is a hyperscaler under the guidelines?
A global cloud provider with at least 25 MW power requirement, a global data centre footprint and no co-location services.
Do data centre operators qualify?
Yes. Operators providing core infrastructure including co-location are a recognised category.
Does reselling cloud qualify?
No. Trading, retailing and leasing are excluded.
Does managed IT services qualify?
Training and consultancy and staff augmentation are excluded, so it depends on whether the core is technology delivery.
Do cloud models matter?
The guidelines cover public, private, hybrid and multi-cloud models.
Do I need my own data centre?
No. A cloud service provider or a cloud-based application operator can qualify without one.
What staff do I need?
At least two full-time knowledge workers at RM5,000 average base salary, within 12 months.
What spend do I need?
At least RM50,000 a year on the MD activities.
Is the tax incentive automatic?
No. It is a separate application.
Can you check my SaaS model?
Yes. We map your product to MDEC's areas and confirm borderline points.
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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