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Information and Communication Technology and MSC Malaysia Status

Updated: Nov 4, 2020

1. Information and Communication Technology Services (ICT)

Companies providing an ICT consultancy services include those providing consultancy services in the purchase of computers, the implementation of software development, and the selection of a system integrator, as well as other consultancy services that involve the provision of independent professional services and advice, including advice on business strategies, organisational set-ups and future directions of the company.

ICT-related services include hardware and software consultancies, database activities, content development, internet-based business application services, provision of e-commerce services/solutions, system integration, computer-assisted manufacturing services, and operation of call centres and centralised help-lines.

Hardware and software consultancies provide services such as supporting and developing strategies in the application of servers, networks, computers, etc.

Database activities include data management, data security and data retrieval services. Content development services include producing educational CD-Rom, providing on-line news and information, gaming software, etc.

Internet-based business application services include e-mail services, Application Service Provider (ASP) services, hosting services, etc.

Electronic commerce (e-commerce) is a commercial transaction between parties entered into an electronic medium without the physical presence of the parties. E-commerce transactions can be concluded anytime and anywhere, regardless of national boundaries. E-commerce services/solutions include Electronic Government (e-Government), Business-to-Business, Business-to-Consumers, etc.

System integration services include Electronic Database Information (EDI), data warehousing and Electronics Application Integration (EAI).

Computer-assisted manufacturing services include process automation, robotics, automated material handling system and supply chain integration/management.

The liberalised activities among the computer and related services are as follows:

(i) Consultancy services relating to the installation of computer hardware (CPC 841);

(ii) Software implementation services - system and software consulting services, system analysis services, system design services, programming services and system maintenance services (CPC 842);

(iii) Data processing services - input preparation services, data processing and tabulation services, time sharing services and other data processing services (CPC 843);

(iv) Data base services (CPC 844);

(v) Maintenance and repair services of computers (CPC 845); and

(vi) Other services - data preparation services, training services, data recovery services and development of creative content (CPC 849).

2. Licensing and Registration

(a) Class and Individual Licences

Under the Communications and Multimedia Act, 1998 (CMA), there are four (4) categories of licensable activities (Network Facilities Provider (NFP), Network Services Provider (NSP), Content Applications Service Provider (CASP), Applications Service Provider (ASP)). Within the activity categories, there are two (2) key types of licences:

(i) Individual Licence

Individual licence requires a high degree of regulatory control which is for a specified person to conduct a specified activity and may include special conditions; and

(ii) Class Licence

Class licence is a ‘light-handed’ form of regulation which is designed to promote industry growth and development with easy market access.

(b) Licensing Category

(i) Network Facility Providers

Network Facilities Providers are the owners/providers of network facilities infrastructure such as cables, towers, satellite earth stations, broadband fibre optic cables, telecommunications lines and exchanges, radio communications transmission equipment, mobile communications base stations and broadcasting transmission towers and equipment. They are the fundamental building block of the convergence model upon which network, applications and content services are provided.

Individual Licence

• Earth Stations

• Fixed links and cables

• Radio communications transmitters and links

• Satellite hubs

• Satellite control station

• Space station

• Submarine cable landing centre

• Towers, poles, ducts and pits used in conjunction with other network facilities

Class Licence

• Niche or limited purpose network facilities

Exempt/ Unlicensed

• Broadcasting and production studios

• Incidental network facilities

• Private network facilities

(ii) Network Service Providers

Network Service Providers provide the basic connectivity and bandwidth to support a variety of applications. Network services enable connectivity or transport between different networks. A network service provider is generally also the owner of the network facilities. However, a connectivity service may be provided by a person using network facilities owned by another licensee.

Individual Licence

• Bandwidth services

• Broadcasting distribution services

• Cellular mobile services

• Access applications service

• Space services

• Switching services

• Gateway services

Class Licence

• Niche customer access

• Niche connection services

Exempt/ Unlicensed

• Incidental network services

• LAN services

• Private network services

(iii) Application Service Providers

Application Service Providers provide particular functions such as voice services, data services, content based services, electronic commerce and other transmission services. Applications services are essentially the functions or capabilities, which are delivered to end-users.

Class Licence

• PSTN telephony

• Public cellular services

• IP telephony

• Public payphone services

• Public switched data services

• Audiotext hosting services provided on an opt-in basis

• Directory services

• Internet access services

• Messaging services

Exempt/ Unlicensed

• Electronic transaction service

• Interactive transaction service

• Networked advertising boards and cineplex

• Web hosting or client server

(iv) Content Application Service Providers

Content Application Service Providers represent a special subset of applications service providers including television and radio broadcast services and services such as online publishing (currently exempt from licensing requirements) and information services.

Individual Licence

• Satellite broadcasting

• Subscription broadcasting

• Terrestrial free to air TV

• Terrestrial radio broadcasting

Class Licence

Following limited content applications service:

• Content applications service limited in its availability to:

• Vehicles, vessels, railway or aircraft used for hire or reward or for any other valuable consideration

• A single commercial or residential building

• A restricted geographical area

• A content applications service of limited appeal or which is targeted to a special interest group and available through subscription by persons using equipment specifically designed for receiving the said service

• A content applications service where the content is remotely generated and distributed through a network service and displayed on a screen

• A content applications service for distance learning purpose

• A content applications service linked or associated specifically to a sporting, cultural or other one-off event

Exempt/ Unlicensed

• Internet content applications services

3. MSC Malaysia Status Company Specific Immigration Procedures

Companies granted MSC Malaysia status and incentives are allowed to employ expatriate knowledge workers without any restriction. A “knowledge worker” is an individual who holds one of the following:

• Tertiary qualification from an institution of higher learning (in any field); or

• Diploma in multimedia/ICT or specialised ICT certification plus at least 2 years relevant experience in multimedia/ICT or in a field that is a heavy user of ICT; or

• Professional, executive, management and technical, work categories in information technology (IT) enabled services eg. IT/IS Professionals, Finance/Accounting, Business Administration.

Special exemptions are given to foreign knowledge worker who does not meet the above but to be employed in the following clusters:

• Shared Services and Outsourcing cluster - foreign workers with knowledge-based skills that are not prevalent in Malaysia, required by MSC Malaysia status companies.

• Creative Multimedia Content cluster - workers who are utilised for their creative talent to produce value-added creative work for MSC Malaysia status companies.

ICT companies located outside the MSC are required to submit their applications for expatriate posts directly to the Immigration Department.

If you would like to know more, please contact Bestar.

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