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B21 MSC MALAYSIA

Introduction
MSC Malaysia (formerly Multimedia Super Corridor) was launched on 27 Jun 1998 and it encompasses an
integrated environment that encourages innovation to reach new technology frontiers, promotes partnership
with global IT players and provides opportunities for mutual enrichment and success.
Key economic focus areas
The status of MSC Malaysia designated area has been divided into two distinct categories, namely MSC
Malaysia Cybercity and MSC Malaysia Cybercentre.
MSC Malaysia Cybercity MSC Malaysia Cybercentre
Self-contained intelligent city with world-class
business and living environment offering the
10-point MSC Malaysia Bill of Guarantees (BoGs)
A building or complex with basic enabling
environment offering partial BoGs.

Includes:
Cyberjaya, Technology Park Malaysia, Universiti
Putra Malaysia-Malaysia Technology Development
Corporation (UPM-MTDC), Kuala Lumpur City
Centre, Kuala Lumpur Tower, Penang Cybercity 1,
and Kulim High Tech Park
Includes:
Kuala Lumpur Sentral, Melaka International Trade
Centre, Menara MSC Cyberport in Johor, Mid
Valley City, G Tower, Bangsar South City, TM
Cybercentre in Kuala Lumpur, Bandar Utama, i-
City Shah Alam in Selangor, Meru Raya in Ipoh,
and Spansion in Penang.
The 10-point MSC Malaysia BoGs are:
World class physical and information infrastructure
Unrestricted employment of knowledge workers
Freedom of ownership
Freedom of sourcing capital globally for MSC Malaysia infrastructure and borrowing funds
Competitive financial incentives
Regional leader in Intellectual Property protection and cyber laws
No censoring of Internet
Globally competitive telecommunication tariffs
Tender key MSC Malaysia infrastructure contracts to leading companies willing to use MSC as their
regional hub
High powered implementation agency to act as an effective one-stop super shop.
Institutions of Higher Learning (IHLs) or faculties of IHLs, and incubators are not required to locate in an
MSC Malaysia Cybercity or Cybercentre, but will be eligible for benefits conferred by some parts of the
BoGs.
MSC MALAYSIA
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Multimedia Development Corporation
The Multimedia Development Corporation (MDeC) was established to take charge of the development and
implementation of MSC. It is a one-stop client centre that will expedite applications for visas and other
licences and permits.
Incentives
Financial incentives
MSC Malaysia status
company (New
companies) whose
activities or products
are of national and
strategic importance
Pioneer status with full income tax exemption for 5 years extendable to 10
years, or 100% investment tax allowance (ITA) on qualifying capital
expenditure for 5 years to be utilised against statutory income for new
companies engaged in highly capital-intensive activities or whose
multimedia activities are treated as cost centres.
No duties on importation of multimedia equipment.
R&D grants for local small and medium-sized majority Malaysian-owned
companies.
Effective 1 Oct 2002, non-resident companies are exempted from payment
of Malaysian income tax on the following types of income received from an
approved MSC Malaysia company (located in specified areas):
(a) payment for technical advice or technical services;
(b) licensing fees in relation to technology development; and
(c) interest on loans for technology development.
MSC Malaysia companies located in Cyberjaya, Technology Park Malaysia
Phase 1, Universiti Putra Malaysia-Malaysia Technology Development
Corporation Incubator 1, or Petronas Twin Towers are exempted from
deducting the withholding tax under S. 109 and S. 109B of the Income Tax
Act 1967 (Income Tax (Exemption) (No. 13) Order 2005).
ICT companies
relocating into
Cybercities and
Cybercentres
Effective from 8 Sep 2007, ICT activities including computer software
development relocating to Cybercities/Cybercentres are given:
Pioneer status with full income tax exemption for a period of 10 years; or
ITA of 100% on qualifying capital expenditure incurred for a period of 5
years to offset against 100% of statutory income.
Existing companies
operating in Malaysia
MSC Malaysia tax incentives will apply to the value-added income (i.e. the
additional statutory income above the average income for the past 3 years), or to
the value of new investment made in MSC Malaysia.
Owners of new
buildings in
Cyberjaya
From Y/A 2006, Industrial Building Allowance of 10% for owners of new
buildings occupied by MSC Malaysia-status companies in Cyberjaya (including
completed buildings yet to be occupied) for 10 years.
For further details on ITA incentives, please refer to Promotion of Investments (Determination of Assets
under S. 29B in respect of MSC status companies) Order 2001.

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Eligibility for MSC Malaysia status
MSC Malaysia status
company
A provider or a heavy user of multimedia products and services.
Employ substantial number of knowledge workers.
Provide technology transfer and/or knowledge to Malaysia, or contribute to
the development of MSC Malaysia, or support Malaysias k-economy
initiatives.
Should not be engaged in non-qualifying activities such as manufacturing,
trading and consultancy (i.e. general professional advice not tied to any
new multimedia application developed in-house).
Once granted MSC Malaysia status, additional conditions to be complied:
Establish a separate legal business entity for MSC Malaysia qualifying
businesses and activities (either locally incorporated company or a branch of
a foreign company).
Locate MSC Malaysia operations designated areas within six months from
the date of approval.
Ensure that at least 15% of the total number of employees of MSC Malaysia
company are knowledge workers.
Comply with MSC Malaysia environmental guidelines.
Institutions of higher
learning (IHLs)
IHLs with faculties offering internationally recognised standard of higher
education in multimedia, information technology, engineering (selected),
sciences (selected) and other related fields that will contribute to the
development of human resources for MSC Malaysia are also eligible. The
following criteria must be satisfied:
Provide or be a heavy user of multimedia products and services.
Grant either diploma or degree courses in multimedia, information
technology and related fields for a training period of two years and above.
Establish a multimedia or a qualified faculty conducting multimedia courses,
programmes and related activities.
Employ a substantial number of knowledge workers.
Conduct and support R&D activities.
Be registered as a separate legal entity.
Comply with Lembaga Akreditasi Negara guidelines.
Incubators Incubators housing early stage growth companies are also eligible. The following
criteria must be satisfied:
House early stage growth companies (i.e. seed-level / start-up companies)
involved in the ICT/Multimedia (e.g. software, e-commerce, telecom),
biotechnology and/or bio-informatics.
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Provide basic facilities such as water and electricity, internet access
(minimum bandwidth of 128kbps), share facilities (e.g. meeting room,
reception, audio-visual systems), business advisory services (in-house or
outsourced) and minimum 2,000 sq ft floor space.
Dedicated management team to provide business support services in
nurturing incubatees besides managing the physical infrastructure. All
newly formed incubators must register with the Companies Commission of
Malaysia within 1 month of obtaining MSC Malaysia status.
Definition of early stage growth companies:
Seed level-companies incorporated within the past 2 years and have
ideas or concepts that require funds for proof of concept;
Start up-companies in the process of setting up or have been in
business for a short time and require capital for commercialisation of
their products/solutions. These companies may not be generating
profits yet.
Shared services and
outsourcing (SSO)
Companies performing SSO activities must satisfy the following criteria:
More than 70% of the revenue must be from outside Malaysia.
Employ at least 85% knowledge workers.
With minimum of 100 employees by the third year of operation.
70% of investment/operation to be in an MSC-designated area within
6 months of MSC Malaysia approval.
MSC Malaysia status application is available online via: http://wizard.mscmalaysia.my/wizard