Choosing The Right Cybercity or Cybercentre For Your Company

In the race of technology innovations today, Malaysia is fortunate to have the right policies and agencies in place to monitor the progress of local technology scene.

Launched by Tun Mahathir in 1996, MSC (formerly known as Multimedia Super Corridor) has been playing a crucial role in accelerating the growth of the nation’s digital economy. To date, there are almost 3000 companies registered under MSC status that have collectively generated close to RM 500 bil in revenue.

The introduction of MSC also lead to the birth of a new breed of office spaces nationwide – the cybercities and cybercentres, digital hubs that house the MSC Status companies.

How does MSC status benefit a company?

MSC Malaysia status is rewarded by Malaysian Government to local and foreign ICT or ICT-facilitated companies. These companies are entitled to a set of incentives, rights, and privileges known as the Bill of Guarantees (BoG) that are designed to provide a conducive environment for the development of companies.

The Bill of Guarantees include:

BoG 1: To provide a world-class physical and information infrastructure.

BoG 2: To allow unrestricted employment of local and foreign knowledge workers.

BoG 3: To ensure freedom of ownership by exempting companies with MSC Malaysia Status from local ownership requirements.

BoG 4: To give the freedom to source capital globally for MSC Malaysia infrastructure, and the right to borrow funds globally.

BoG 5: To provide competitive financial incentives, including Pioneer Status (100 percent tax exemption) for up to ten years or an Investment Tax Allowance for up to five years and no duties on the importation of multimedia equipment.

BoG 6: To become a regional leader in Intellectual Property Protection and Cyberlaws.

BoG 7: To ensure no censorship of the Internet.

BoG 8: To provide globally competitive telecommunications tariffs.

BoG 9: To tender key MSC Malaysia infrastructure contracts to leading companies willing to use MSC Malaysia as their regional hub.

BoG 10: To provide a high-powered implementation agency to

Features of Cybercity & Cybercentre

Cybercities and Cybercentres are established to provide the right ecosystems that facilitate the growth of MSC Status companies. Even though Cybercities and Cybercentres are similar in terms of benefits and requirements, the latter usually refers to bigger areas such as Cyberjaya and Technology Park Malaysia in Bukit Jalil.

The application of Cybercities or Cybercentres status is eligible to any office building as long as they adhere to the MSC Malaysia Performance Standards, which include having access to at least two types of public transportation as well as a system that can restore electricity in under 15 seconds in the event of a power outage.

The developers have to go through a stringent process to ensure that all Cybercities and Cybercentres provide business environments and infrastructure that cater to the specific needs of MSC companies and ICT investors.

Choosing the right Cybercities and Cybercentres

In general, having the Cybercities or Cybercentres status makes a building more attractive to both MSC Status and non-MSC status companies, as the status translates into excellent connectivity and infrastructure.

Tier 1 MSC Status companies which are eligible for the full set of BoGs benefits are required to relocate to designated premises within Cybercities and Cybercentres. For Tier 2 MSC Status companies that opt to have their office outside of Cybercities and Cybercentres, they are still entitled to most BoGs except BoG 1 and BoG 8.

In 2015, MSC4Startup is introduced to complement the startup ecosystem in Malaysia where young companies are entitled to certain BoGs without having to relocate to MSC-designated building.

Digital is the economy

Seeing digital economy initiatives at the forefront of Budget 2020, some have said that ‘digital is the economy’. Malaysian Digital Economy Corporation (MDEC), the agency behind MSC, announced at the end of 2019 that it will accelerate development in the fintech, blockchain, and drone sectors by attracting global digital talents and interest from investors.

With various initiatives and attractive grants being introduced in the technology industry, the role of MSC is more so important as digital companies and entrepreneurs drive Malaysia towards regional digital powerhouse in the era of Industry 4.0, ensuring that the prosperity of digital economy improves the quality of lives for all Malaysians.

Contributed by: Isabelle Thye

For further details please email corporate@hartamas.com

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