Legal Updates for June 2024

The Rise of Johor as a Data Centre Hub

Data centres have seen a boom due the world's growing reliance on cloud-based technology and consumption of online content. More recently, data centre investments have become a strategic imperative for the Artificial Intelligence ("AI") era, given the massive amounts of compute and data involved in the training, testing and deployment of AI solutions and applications. The escalating strategic competition between the United States and China has motivated companies from both China and the West to broaden their horizons and grow their presence in Southeast Asia, particularly in the semiconductor and digital infrastructure sectors. This trend has triggered a surge in the establishment of data centres across the Southeast Asian region, in particular Johor, Malaysia.

In this update, we will delve into the factors that drive the growing interest for data centre investments in Johor, and provide a brief overview on some of the issues that organisations should consider as they contemplate shifting to set up data centre operations in Johor.

Occupational Safety and Health (Construction Work) (Design and Management) Regulations 2024

Following the coming into force of the amendments to the Occupational Safety and Health Act 1994 ("OSHA"), and the Occupational Safety and Health (Plant Requiring Certificate of Fitness) Regulations 2024 and the Occupational Safety and Health (Licensed Person) Order 2024, on 1 June 2024, the Minister of Human Resources has further made two new regulations under the OSHA, one of which is the Occupational Safety and Health (Construction Work) (Design and Management) Regulations 2024 ("OSHA Construction Regulations").

This Update focuses on some significant duties and obligations of the parties involved in a construction project introduced under the OSHA Construction Regulations, including its scope of application, the client’s duties, general duties on safety and health, duties of contractors and designers, minimum welfare facilities, and general requirements for all construction sites.

New Malaysia Digital Tax Incentive for Technology Investments in Malaysia

On 31 May 2024, the Malaysia Digital Economy Corporation, with the support of the Ministry of Digital and the Ministry of Finance, has introduced a new outcome-based tax incentive scheme ("MD Tax Incentive") for eligible Malaysia Digital Status (formerly known as Multimedia Super Corridor Status) companies.

It is anticipated that the MD Tax Incentive will create a more conducive environment for foreign investments in the digital economy and ecosystem in Malaysia.

This Update aims to provide a quick overview and guidance in navigating the qualifying criteria and understanding the benefits offered under the newly introduced MD Tax Incentive.