MSC Malaysia for Startups Programme FAQ

1.What is MSC Malaysia for Startups Programme?

MSC Malaysia for Startups Programme is a programme that provides an alternative for companies to choose if they prefer to be an MSC Malaysia Status company without being tied to any location requirements and it allows MSC Malaysia Status companies to go beyond designated MSC Cybercities and Cybercentres.

 

2.When will the MSC Malaysia for Startups Programme happen?

MSC Malaysia for Startups Programme will be launched on 12 May 2015 onwards.

 

3.Why is there a need to have MSC Malaysia for Startups Programme?

It is implemented with the following intentions:

a)    To increase in the participation of ICT industry in MSC Malaysia’s community

b)    To ease hiring of talents due to flexibility of location, which will spur the local economy

c)    To spur growth of Digital Entrepreneurs, SMEs and Startups

d)    To increase productivity & quality of life in parallel

e)    To spur growth of regional ICT companies with the multi-tiered incentives

In summary, MSC Malaysia for Startups Programme will catalyze the growth of ICT industry beyond current designated location.

4.If I am an existing MSC Malaysia Status Company, how will this affect me?

Any MSC Malaysia Status company approved after 1 January 2015 will have a choice of operating an office in an MSC Designated area, or operating from any commercial premises in Malaysia. Based on these options, the MSC Malaysia Status company will fall under these categories:

a)    Tier 1 – Located in Designated Premises within MSC Malaysia Cybercities / Cybercentres

b)    Tier 2 – Located in Commercial Premises within MSC Malaysia Cybercities / Cybercentres

c)    Tier 3 – Located outside of MSC Malaysia Cybercities / Cybercentres

Existing MSC Malaysia Status companies (approved prior to 1 January 2015) will still need to adhere to the location requirement as stated in their Condition of Grant (CoG).

MSC Malaysia Status companies approved after 1 January 2015, and who have yet to activate their Pioneer Status incentive, is eligible to apply for Tier 3.

5.Do I still need to maintain an office within Cybercities / Cybercentres?

MSC Malaysia Status companies in Tier 3 approved after 1 January 2015 can locate its entire operation to any commercial location and need not maintain an office within designated areas in Cybercities or Cybercentres. However, companies located outside of Cybercities or Cybercentre will not enjoy the full MSC Bill of Guarantees (BoG) and will be subjected to certain rules and regulations. Please refer to Table 1: Multi-tiered Incentive in FAQ No.6 below on the BoGs awarded to the MSC Malaysia Status companies.

 MSC Malaysia Status companies approved prior to 1 January 2015 will still need to adhere to the location requirements to a designated area in Cybercities or Cybercentre as stated in their Conditions of Grant (CoG).

6.If I continue to operate within Cybercities / Cybercentres after the MSC Malaysia for Startups Programme is in effect, what kind of benefits will my MSC Malaysia Status company enjoy?

Please refer to the table below on the different incentives accorded to MSC Malaysia Status companies, subject to the chosen location.

Table 1: Multi-tiered Incentives


 

7.Do I need to inform MDeC if I choose to relocate my company outside of the MSC Malaysia Cybercity / Cybercentre after the MSC Malaysia for Startups Programme is in effect?

As mentioned in the Conditions of Grant (CoG) of MSC Malaysia Status, all MSC Malaysia Status companies must inform MDeC should there be any changes in your company operation. This is inclusive of change of office address.

Note: If an MSC Malaysia Status company (approved prior to 1 January 2015) chooses to relocate to outside of Cybercities and Cybercentres after MSC Malaysia for Startups Programme is in effect, this will be considered a breach in the Conditions of Grant.

8.Can I change my MSC Malaysia Status Company from Tier 1 to Tier 2 or Tier 3, or vice versa?

If you are a Tier 1 or Tier 2 MSC Malaysia Status company approved before 1 January 2015, there is no provision for you to apply to be Tier 3.

Tier 3 MSC Malaysia Status companies, who are looking to move to Tier 1 or Tier 2, can only do so after the expiration of the 5 years of Pioneer Status incentive.

An MSC Company can remain in Tier 3 for an indefinite period as long as the company is active, however the company will be liable to the applicable Taxation Laws in Malaysia upon expiration of the Pioneer Status incentive.

9.Why is the partial taxation exemption for Tier 3 companies only valid for 5 years?

This was a policy decision when the plan for tier 3 companies was drawn up. Tier 3 companies will only enjoy Pioneer Status tax exemption incentive for 5 years. To enjoy another subsequent 5 years, the companies will have to apply for Tier 1 or Tier 2.

10.I am an MSC Malaysia Status company that was approved before 1 January 2015. Is it possible for me to locate in an area outside of the Cybercities and Cybercentres and enjoy the benefits of the MSC Malaysia for Startups Programme after 1 January 2015?

MSC Malaysia for Startups Programme is only applicable to MSC Malaysia Status companies approved from 1 January 2015, they will not be able to migrate to Tier 3 and participate in the MSC Malaysia for Startups Programme.

11.What will happen to all the MSC Cybercities and Cybercentres?

MSC Malaysia Cybercities and Cybercentres will continue to provide conducive business locations to existing MSC Malaysia Status companies. With MSC Malaysia for Startups Programme taking effect on 12 May 2015, new Cybercities and Cybercentres will continue to be established to;

a)    Provide ready sites that offer variety of premier business locations for MSC Malaysia Status companies and ICT investors that require them

b)    Further spread the benefits of MSC Malaysia’s full suite of BoG nationwide to support the growth of MSC companies and for more balanced regional development

12.Will the MSC Malaysia for Startups Programme be in place beyond 2020?

The mechanisms are put in place to meet our long-term MSC Malaysia plan.

13.What was the fundamental reason behind placing all MSC Malaysia Status companies in the same location called the Multimedia Super Corridor back in 1996?

MSC or Multimedia Super Corridor was first conceptualized in 1996, with a strategy to catalyse the transformation of Malaysia economy and society into the Information Age. The MSC was conceived as the next engine of growth for the Malaysia economy.

Phase 1 of MSC Malaysia was the development of a 15x50 km corridor ranging from KLCC to KLIA, including Cyberjaya and Putrajaya. The single corridor was built to ensure a consolidated and well-managed growth area.

14.Will there be an impact to my MSC Malaysia Status company if I decide to relocate outside of MSC Malaysia locations?

MSC Malaysia Status companies approved prior to 1 January 2015 will still need to adhere to the location requirements to a designated area in Cybercities / Cybercentres as stated in their Conditions of Grant (CoG). If you choose to relocate outside of MSC Malaysia locations, this will be considered a breach in the Conditions of Grant.

15.How will the MSC Malaysia location requirement affect companies that started out in Cybercities / Cybercentres but now want to open branch offices in other non-MSC designated areas?

This is allowed, as long as the team involved in the MSC Malaysia Status Activities are located within MSC Malaysia Cybercities / Cybercentres.

16.If my company is approved after 1 January 2015 and decided to locate within MSC Malaysia Cybercity / Cybercentre, what if one year later I decide to move my business to outside of MSC Malaysia Cybercity / Cybercentre. Is this allowed and how this will affect my incentives?

This is allowed on the basic that your company has not activated the Pioneer Status incentive yet.

MSC Malaysia Status companies in Tier 1 or Tier 2 approved after 1 January 2015, and who have yet to activate their Pioneer Status incentive, is eligible to apply for Tier 3.

17.Can a 100% foreign-owned company apply for MSC Malaysia for Startups Programme?

Yes

18.What is the minimum paid-up capital required for company to apply for MSC Malaysia for Startups Programme?

The minimum paid-up capital to apply for MSC Malaysia for Startups Programme is RM2.00.

19.With this programme, what is the minimum paid-up capital required for the company to apply for foreign Knowledge Worker (FKW)?

If company (after been awarded MSC Malaysia Status) has the intention to apply for Foreign Knowledge Worker (FKW), a minimum paid-up of RM2.00 is required for one (1) year work permit. Beyond that, company must increase paid-up capital to RM100,000 if a two (2) year work permit is required.

20.How long will the MSC Malaysia Status application process take?

Upon full submission of accurate and complete documentation, the Service Level Agreement (SLA) period is 30 days to seek a decision from the MSC Approval Committee.

21.Can companies approved after 1 January 2015, who are already located at a Cybercity or Cybercentre, apply for Tier – 3?

Yes, as the gazette was only approved on 19 March 2015, company has the option to remain located until the expiry of the current tenancy agreement and subsequently locate to their desired location.

22.I am a Cybercity / Cybercentre Manager (CCM) and currently have applied for additional designated premises. What will happen to my application?

Your application will be processed as per normal procedure. New MSC Malaysia designated premises will continue to be established to provide conducive business location to the existing and new MSC Malaysia Status companies who require the world class infra as offered under BoG1.

23.As the newly approved Cybercity / Cybercentre, with this MSC Malaysia for Startups Programme, how can I attract MSC Malaysia Status companies to my MSC Malaysia Cybercity / Cybercentre?

MSC Malaysia Cybercity / Cybercentre should offer unique value proposition and offering to differentiate themselves with other business locations in order to attract MSC Malaysia Status companies and other high value entities to their MSC Malaysia Cybercity / Cybercentre.

24.Who can I contact for more information?

Please contact our Client Contact Centre (CliC) at This email address is being protected from spambots. You need JavaScript enabled to view it. or 1-800-88-8338 (within Malaysia) or +603 8315 3000 (outside Malaysia).

 

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