Congratulations, Rakuten Malaysia for attaining your MSC Status!

One of our services is to provide consultancy and program management for MSC application and attainment. It helps that we have gone through the MSC status approval ourselves, but in general, any company intending for MSC needs to be aware that there is some work involved.

In general, you need to understand that you can do this on your own. There is no requirement whereby an independent third party is needed. That being said, in order to smoothen out the process, usually, someone who has gone through the process should be able to assist in a lot of areas. We are pretty flexible in how we work with our clients. For some, our involvement is very heavy, from writing business cases to financial projections etc. For others, we basically advise and manage the communications between MDEC and the company – which is less hectic, but more work for the client. Mostly, our clients come to us because they want MSC due to the tax breaks, and they have better things to do than to go back and forth with MDEC to iron out the business plan and stuff. For us, this IS our ‘better thing to do’, so you get a complete focus and a guarantee success fee attached to our quote.

Once you have decided to go for MSC, we will sit with you to decide on which is the best sector to go in for. Infotech, Creative Multimedia, Global Outsourcing, with each breaking up into subsets of their own. It’s easier said than done actually, because (strangely) sometimes the MSC activities might not be your core focus activities.¬†For instance if you are a reseller, then trading cannot be part of your activities. If you are training, you cannot put that into your activities. However, if you have a branch out R&D or software development, you could technically park those as MSC.

After the decision, we fill in a pre-application form, then follow up with the business analyst. Not all BAs are created equal. We know because we have dealt with a whole train of them. Some are better than others – and we generally jostle to get the better ones for our client.

From there the bulk of the work is in defining the business and financial plan. There is more work than meets the eye here, because there will be a lot of back and forth with the BA before he/she is comfortable to present it. You generally will face some issues – we have faced more than our share – and having a good BA and a good rapport with MDEC is key to get things done here, both of which we will attain.

Once the BA is more or less ready – in general you are fine. However, like in this case, there were still a lot of clarifications to be done. I had to meet with the strategists and head of programs for MDEC in order to push our approval through, in terms of explaining to them our viewpoint. Where MDEC needs to improve is in how they view different business models and revenue models, especially in dynamic environments like cloud applications and such.

Overall, we give up to 75% of our fees as success based (means, no payment until certification). In some special cases, it’s even 100%, means there is no outlay (except for the RM2000 application fee direct to MDEC), until you get your cert.

If you need more information, feel free to contact us at avantedge@pkfmalaysia.com.