Quick answer: MDEC's Malaysia Digital (MD) activity list does not name general software development as an activity. A software company can still qualify if its work falls within a named area, such as artificial intelligence, big data analytics, cybersecurity, cloud-based applications, systems and network architecture, fintech, UI and UX, or embedded software. Reselling software and traditional web design and development are excluded, so describe the technology you build, not the service category.
- General software development is not named in MDEC's activity list.
- Qualify by mapping your product to a named area such as AI, BDA, cybersecurity, cloud, systems architecture, fintech or UI/UX.
- Software reselling and leasing are excluded.
- Traditional web design and development is excluded.
- Confirm borderline cases with MDEC before you invest in the application.
Where Software Work Can Map
| If you build | Possible MD area |
|---|---|
| Machine learning or generative AI products | Artificial intelligence |
| Analytics platforms over large datasets | Big data analytics |
| Security software | Cybersecurity |
| Cloud-native applications | Data centre and cloud computing, which includes cloud-based applications |
| Enterprise system and network design | Systems and network architecture design and support |
| Payment or financial platforms | Fintech |
| Interface design products | UI and UX |
| Firmware | IC design and embedded software |
| Process automation | Autonomous technologies, including robotic process automation |
What Software Companies Cannot Claim
| Activity | Status |
|---|---|
| Reselling or leasing software | Excluded |
| Traditional web design and development | Excluded |
| IT consultancy and training | Excluded |
| Staff augmentation | Excluded |
How to Position the Application
Describe the product
Say what technology you build and for whom.
Name the MD area
Map it to a named activity area.
Show it is yours
The company must perform the work itself.
Show the team
Two knowledge workers on the MD activities at RM5,000 average base salary.
Mistakes Software Companies Make
Calling it software development
The list names technologies, not the general category.
Mixing resale with development
Resale is excluded, so separate it.
Describing a website agency
Traditional web design is excluded.
Outsourcing the build
Core activities must be performed by the company.
Not sure where you stand? WhatsApp us. We will check it before you apply.
Three Scenarios
Scenario 1. A company builds a machine learning product for retailers. It maps to artificial intelligence and positions its application accordingly.
Scenario 2. A web agency builds brochure websites. Traditional web design is excluded, so it does not qualify on that basis.
Scenario 3. A company develops its own cloud-native platform and maps it to cloud computing, then 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.
Does a software company qualify for Malaysia Digital status?
It can, if its work falls within a named MD activity area such as AI, big data, cybersecurity, cloud, systems architecture, fintech or UI/UX. General software development is not named.
Is software development an MD activity?
MDEC's list does not name general software development, so map your product to a named area.
Does SaaS qualify?
Cloud computing includes cloud-based applications designed for, hosted and operated on cloud infrastructure, so a SaaS product may map there. Confirm with MDEC.
Does web development qualify?
Traditional web design and development is excluded.
Does reselling software qualify?
No. Trading, retailing and leasing software are excluded.
Does IT consulting qualify?
No. Training and consultancy are excluded.
Does an app developer qualify?
Only if the app falls within a named area, for example fintech or AI.
Does custom software for clients qualify?
It may if it falls in a named area, but a services-only model close to staff augmentation is excluded.
Does embedded software qualify?
Yes. IC design and embedded software are an MD activity.
Do I need to own the product?
The company must perform the approved activities itself and cannot outsource the core work.
What if my product fits no named area?
Ask MDEC whether it can be considered under other emerging technologies.
Can you help position my application?
Yes. We map your product to the right MD area and prepare the 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.
Talk To Us Now
Thinking of applying for MD status? We will assess it first. All consultations are by video call.