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SHAH ALAM - The revocation of Network School's Malaysia Digital status has drawn attention to one of Malaysia's flagship initiatives to attract technology companies and digital investments, highlighting that regulatory compliance is a fundamental requirement for businesses seeking to benefit from government-backed incentives under the programme.
According to the Malaysia Digital Economy Corporation (MDEC), Malaysia Digital status is a government recognition granted to eligible companies undertaking approved digital economy activities in Malaysia.
Companies awarded the status are eligible to participate in the Malaysia Digital initiative and may receive various government incentives, rights and privileges, subject to the necessary approvals and continued compliance with applicable laws and regulations.
MDEC said the initiative is intended to provide businesses with greater flexibility to operate, grow, expand and invest anywhere in Malaysia while supporting the country's digital economy.
On its official website, MDEC said Malaysia Digital was established to continue to drive the nation's digital economy to new heights, building on the foundation of the former MSC Malaysia initiative.
“As of April 2025, more than 6,000 companies had been awarded Malaysia Digital status, reflecting the programme's role in expanding Malaysia's digital ecosystem across various sectors of the economy.
“To qualify, companies must be incorporated under the Companies Act 2016, be resident in Malaysia, undertake one or more approved Malaysia Digital activities and maintain a minimum paid-up capital of RM1,000.
“After obtaining Malaysia Digital status, companies are also required to continuously comply with several operational conditions,” it said.
Within 12 months of receiving the status, businesses must commence their approved digital activities in Malaysia, employ at least two full-time knowledge workers earning an average monthly base salary of RM5,000 and incur a minimum annual operating expenditure of RM50,000 for approved activities.
These conditions must continue to be met throughout the period in which the company holds Malaysia Digital status.
The requirements highlight that the programme is intended not only to attract digital businesses but also to ensure they contribute meaningfully to Malaysia's economy through employment, investment and operational activities.
The importance of maintaining compliance was highlighted following MDEC's decision to revoke the Malaysia Digital status of NSO Malaysia Sdn Bhd, the operator of Network School in Forest City, Iskandar Puteri.
MDEC announced today that the revocation took immediate effect after the Iskandar Puteri City Council (MBIP) cancelled the company's business licence and directed it to cease operations.
The corporation said the loss of the business licence meant the company no longer fulfilled the conditions required to retain Malaysia Digital status, which obliges companies to maintain valid licences and permits while complying with all applicable laws and regulations.
While reaffirming its commitment to supporting high-quality digital investments, MDEC stressed that regulatory compliance remained a non-negotiable requirement for all Malaysia Digital status companies.
The development illustrates the significance of Malaysia Digital status beyond incentives alone, as companies must consistently satisfy legal, licensing and operational obligations to remain part of the government's digital economy ecosystem.
