Malaysia’s digital landscape is entering a new era of accelerated growth, driven by Malaysia Digital (MD), the government’s national strategic initiative that aims to put the country at the forefront of the digital economy.
Launched on July 4, 2022 by Prime Minister Datuk Seri Ismail Sabri Yaakob, MD is an initiative to accelerate the growth of the nation’s digital economy, driven by three key principles; flexibility, agility and relevance.
In his speech during the launch of Malaysia Digital, Ismail Sabri said the initiative, via MD Catalytic Programmes (PEMANGKIN), will function holistically in transforming Malaysia’s digital economy ecosystem through three strategic priorities.
This initiative is expected to succeed the 25-year-old MSC Malaysia and it will be driven by the Ministry of Communications and Multimedia (K-KOMM) through the Malaysian Digital Economy Corporation (MDEC).
MD is set to be the engine that accelerates the growth of our ecosystem within the nine focus areas; and drive digital adoption and opportunities in the digital economy via the PEMANGKIN and other competitive offerings.
MD’s inclusive approach aims to harmonise the growing demand of digital solutions with a steady Supply of products and services, whilst continuing to strengthen the enablers such as talents, infrastructure and regulations.
“MD is the government’s national strategic plan to encourage and attract companies, talents, and investments, while also enabling Malaysian businesses and the rakyat to play a leading role in the robust, global digital economy,” MDEC chief executive officer Mahadhir Aziz shared.
“With a new and enhanced framework, MD seeks to transform the nation’s digital capabilities and boost the digital economy via the introduction and execution of various MD Catalytic Programmes, also known as PEMANGKIN.
“These projects are set to evolve Malaysia’s digital economy capabilities and capacities, raise Malaysia’s value proposition for digital investments and nurture technology sectors with significant commercial and economic potential,” he added.
With the new governance structure, MD is built to address three strategic priorities which consist of:
Helping to drive digital adoption among aspiring young entrepreneurs and companies and the rakyat,
Supporting local tech companies to become “Malaysian champions” – successful international players, and
Attracting high-value investments into the country.
Pushing Malaysia’s digital frontier
The MD initiative also aims to enhance programmes under the MSC Malaysia in order to provide a framework that adapts and supports businesses and investors in the current digital economy landscape.
“The existing incentive packages within MSC are limited and subject to stringent conditions which makes it less appealing in the current economic climate.
“Additionally, it was also tied to specific locations, which limits the expansion of MSC activities in other locations. Most digital professionals are concentrated in major cities or urban areas as MSC designated locations and MSC companies are also concentrated in the developed cities,” Mahadhir Aziz said.
“We believe lifting the location requirement for MD companies will allow companies to have the flexibility to operate anywhere in Malaysia which is strategic for businesses.
“MD can address these gaps through an enhanced framework by offering non-location-based incentives (both fiscal and non-fiscal incentives) along with the decoupling of MD Status and Tax Incentives, allowing investors more choices to choose from non-fiscal, fiscal (tax exemption) benefits or both.
“The previous framework does not allow for MSC Status without tax incentive but with the separation, Malaysia can offer more options for investors/companies and provide non-fiscal facilitations to companies that do not require fiscal/tax exemption.
“MD will assist Malaysia to better prepare for today’s ever-changing landscape and set the groundwork for a digital nation, thereby benefiting the rakyat, businesses, and foreign investors,” he added.
MD will enable Malaysia to be better prepared to face the dynamic economic environment and assist in strengthening the foundations of the digital nation to be stronger and the impact will benefit the people, businesses, government and the country.
Near-term plans under Malaysia Digital
MD also seeks to transform the nation’s digital capabilities and boost the digital economy via the introduction and execution of various MD Catalytic Programmes, in other words, PEMANGKIN. The Government through MDEC will be introducing two initial PEMANGKIN which are DE Rantau and Digital Trade.
DE Rantau is a programme with the goal to establish Malaysia as the preferred Digital Nomad Hub in a bid to boost digital adoption and promote digital professional mobility and tourism across the country.
“With this we want to develop digital nomad hubs and a comprehensive local ecosystem to support the digital nomad lifestyle in collaboration with various industry players, and create a new digital nomad pass which will facilitate foreign digital nomads stay in Malaysia
“On the other hand, Digital Trade will promote interoperability, more harmonisation of standards, and approaches to regulatory frameworks, as well as facilitate trade both within and beyond borders.
“As we transition into tomorrow’s digital frontier, we will be introducing more PEMANGKIN to meet the needs and demands of the future for Malaysia,” Mahadhir Aziz said.
Plans for Sabah and Sarawak
On plans for Sabah and Sarawak under the MD initiative, MDEC shared that it is currently engaging with the respective State Government agencies and MDEC will introduce more PEMANGKIN that will benefit all Malaysians.
“Nonetheless, with the Malaysia Digital roll-out nationwide, Digital Nomad programme is intended to boost digital adoption and economic activities across the country as we hope to bring digital expertise across Malaysia, expand skilled local digital talents, and boost local economic recovery in various sectors such as retail and F&B, tourism, and so on,” Mahadhir Aziz said.