How to Set Up a Data Centre or Digital Infrastructure Company in Malaysia

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Malaysia is rapidly emerging as one of Southeast Asia’s most important destinations for data centres, cloud infrastructure and AI-ready digital investment.

According to the Malaysian Investment Development Authority (MIDA), Malaysia approved approximately RM144.4 billion in data centre and cloud computing investments between 2021 and June 2025. MIDA attributes this growth to rising AI demand, Malaysia’s expanding digital ecosystem and national strategies such as MyDIGITAL and the New Industrial Master Plan 2030.

The momentum can also be seen in Malaysia Digital investments. MDEC reported that data centre and cloud infrastructure represented 76.8% of approved digital investments in 2024, while another RM30.95 billion was committed to the Data Centre and Cloud vertical as of June 2025.

Malaysia is no longer simply attracting servers. It is building an ecosystem involving AI, cloud computing, power infrastructure, cooling systems, engineering, semiconductors, telecommunications and digital services.

For local entrepreneurs and foreign investors, the opportunity extends beyond owning a hyperscale data centre. Businesses can participate as data centre operators, cloud providers, engineering companies, equipment suppliers, cooling specialists, technology providers and other digital-infrastructure service providers.

Why Malaysia?

Malaysia’s Ministry of Investment, Trade and Industry has introduced a dedicated Guideline for Sustainable Development of Data Centres. One of the Government’s stated objectives is to position Malaysia as a data centre hub in Southeast Asia while encouraging energy efficiency, renewable energy and more efficient water consumption.

This is important because the next phase of data-centre investment is not simply about building more facilities. New projects increasingly need to demonstrate that they are efficient, sustainable and capable of supporting Malaysia’s wider digital economy.

How to Set Up a Data Centre Company in Malaysia

1. Incorporate a Malaysian Company with SSM

A data centre or digital infrastructure investor may establish a Malaysian private limited company, commonly known as a Sdn. Bhd.

A private company must have at least one director who ordinarily resides in Malaysia by having a principal place of residence in the country.

The company structure should be planned around:

  • Foreign and local shareholding;
  • Paid-up capital and project funding;
  • Ultimate beneficial ownership;
  • Nature of digital or infrastructure activities;
  • Land and property ownership or leasing;
  • Financing arrangements; and
  • Transactions with overseas group companies.

Large foreign-owned projects should consider the corporate and tax structure before substantial capital is transferred into Malaysia.

2. Engage MIDA for Investment Facilitation and Incentives

MIDA and MDEC operate the Digital Investment Office (DIO) to facilitate digital investments in Malaysia. MIDA’s DIO information specifically provides access to the Digital Ecosystem Acceleration (DESAC) Scheme and the Sustainable Development of Data Centre guidelines.

DESAC was introduced to attract quality digital infrastructure projects including data centres and cloud computing.

Depending on the qualifying project and prevailing incentive framework, investment incentives may include fiscal incentives such as Investment Tax Allowances or special tax rates, subject to approval and qualifying conditions.

3. Comply with LHDN Corporate Tax Requirements

A data centre or digital infrastructure company should establish its Malaysian tax and accounting compliance framework from the beginning.

The company should confirm its Tax Identification Number (TIN) and maintain access to the Inland Revenue Board of Malaysia’s MyTax system. LHDN states that company TIN registration is handled online through MyTax, while companies are required to submit their estimated tax payable through Form CP204 and, where applicable, amendments through CP204A.

Official LHDN portals:

Depending on the company’s structure and transactions, key tax matters may include:

  • Corporate income tax;
  • CP204 estimated tax instalments;
  • Capital expenditure and tax incentive treatment;
  • e-Invoice compliance;
  • Withholding tax on qualifying payments to non-residents;
  • Financing and shareholder loans;
  • Cross-border service fees;
  • Management and technical charges;
  • Royalties and intellectual property arrangements; and
  • Transfer pricing.

Transfer pricing is particularly important for multinational groups where the Malaysian company transacts with overseas related parties for financing, technology, management services, equipment, software, cloud services or intellectual property.

The tax and transfer pricing structure should therefore be planned before, rather than after, major intercompany transactions commence.

7. Review MySST and Customs Compliance

Data centre and digital infrastructure businesses should also review their obligations under Malaysia’s Sales and Service Tax (SST) framework administered by the Royal Malaysian Customs Department.

MySST is Malaysia’s official online system for Sales Tax and Service Tax registration, information, returns and related compliance. Whether a data centre operator is required to register for Service Tax depends on the exact nature of the services supplied, the customer arrangements, the applicable taxable-service category and the prevailing registration threshold.

Businesses providing services such as information technology, cloud, digital infrastructure, management, technical support or other taxable services should therefore conduct an SST review rather than assuming that every data centre activity receives the same treatment.

Key SST matters may include:

  • Service Tax registration, where applicable;
  • Classification of taxable services;
  • Treatment of imported taxable services;
  • Digital services supplied by foreign service providers;
  • Service Tax on management, technical or IT-related services;
  • SST invoicing and record keeping;
  • SST-02 return filing and payment; and
  • Exemptions or specific Customs treatment, where applicable.

Official Royal Malaysian Customs / MySST portals:

The SST position should be reviewed based on the company’s actual contractual arrangements and services. This is especially important where the Malaysian entity provides cloud, IT, hosting, management or technical services, or makes payments to overseas service providers.

Malaysia’s Data Centre Opportunity Goes Beyond the Data Centre

The growth of data centres creates opportunities throughout the supporting ecosystem.

MIDA has highlighted the development of Malaysian suppliers in areas including precision cooling, power infrastructure and engineering services, with greater localisation intended to create local business opportunities, technology transfer and skilled employment.

This means Malaysia’s digital-infrastructure opportunity is relevant not only to hyperscale operators, but also to:

  • Electrical and power infrastructure companies;
  • Cooling-system manufacturers;
  • Mechanical and electrical engineering firms;
  • Semiconductor and electronic suppliers;
  • Cloud and cybersecurity businesses;
  • Telecommunications companies;
  • Automation providers; and
  • Other technology and professional-service providers.

Setting Up Your Digital Investment in Malaysia?

A data centre investment is not simply a company-incorporation exercise.

The corporate structure, investment approval, land, power capacity, environmental requirements, tax incentives, financing and transfer pricing arrangements need to work together from the beginning.

Servecorp Group provides one-stop business setup and corporate compliance support for local and foreign investors, including:

  • Malaysian company incorporation;
  • Foreign-owned company setup;
  • Company secretarial services;
  • Shareholding and paid-up capital planning;
  • Accounting and financial reporting;
  • Corporate tax compliance;
  • SST advisory;
  • Payroll and employer compliance;
  • Transfer pricing advisory and documentation; and
  • Ongoing corporate and business advisory.

Ready to Invest in Malaysia’s Digital Future?

If you are planning to establish a data centre, cloud computing, technology or digital infrastructure company in Malaysia, speak with us before finalising your corporate and investment structure.

Contact Servecorp Group today and let our team guide you from company incorporation to accounting, taxation, transfer pricing and ongoing corporate compliance.

Servecorp Group
Beyond Compliance, Empowering Business Success
Your Trusted Corporate Advisory Partner in Penang, Malaysia

Start your digital investment in Malaysia with the right corporate and compliance foundation.