What is the DESAC incentive for data centres in Malaysia?
DESAC is the tax incentive built for data centres. New qualifying companies get an investment tax allowance of 100% (Tier 1) or 60% (Tier 2), or a special tax rate of 10% or 15%. Tier 1 needs RM1bn of capex, and applications close on 31 December 2027. Applicants are measured against MITI’s design PUE and WUE targets.
| Rule | What it says | Applies to |
|---|---|---|
| PUE (MITI guideline) | Proposed design PUE: 1.4 for hyperscale (132 kV and above, over 21.25 MW); 1.6 for purpose-built colocation built after 2020 in that band; 1.7 for others (0.85 to under 21.25 MW) | Applicants for the DESAC incentive; not an operating limit |
| WUE (MITI guideline) | Recommended design WUE of 2.2 m³ per MWh of IT energy or lower | Same |
| DESAC incentive | New companies: investment tax allowance of 100% (Tier 1) or 60% (Tier 2), or a special tax rate of 10% or 15%. Tier 1 needs RM1bn of capex. Applications close 31 Dec 2027 | Qualifying data centres |
The JS-SEZ 5% rate covers AI and quantum supply-chain manufacturing and other sectors, not data centres. Forest City’s 5% rate covers fintech and financial services, not data centres. Existing-company terms and the full conditions are in our research notes.
Sources
Last checked 8 November 2026