So I met another tech company in the Internet marketing space operating out of Kuala Lumpur. As I mentioned before there are only a few companies working in the Internet marketing category over here. This is a European based company that was drawn to open a development office because of the supposed benefits the Multimedia Super Corridor (MSC) would provide.

From speaking with this company and others, I get the sense that they feel the MSC benefits are a bit of a sham or not worth the trouble of jumping through the required hoops. It seems the official designated MSC zones conveniently correspond to the properties of certain landowners. Other places in the city just don’t qualify for the program.

I’ve only been working in an office for three days, but I’m not sure how “Super” the MSC is when the Internet data transfer speeds are painfully slow in central Kuala Lumpur. It’s amazing that I can even make calls on Skype.

Overall, even with the bureaucracy quirks and the slow Internet, I do get the sense that Kuala Lumpur is a great place for a startup of a shoestring.

Update 3/10/2008:

After further conversations, I’ve been told by business owners in the tech business here in Kuala Lumpur that they like the MSC program because makes it easy to hire foreign workers and they pay no taxes. Makes sense.

The Multimedia Super Corridor (MSC) is a collection of areas in and around Kuala Lumpur which offer attractive incentives to draw in multi-national tech businesses and encourage local entrepreneurship in tech. The initiative has been modeled after Silicon Valley. It is intended to provide first-world knowledge and infrastructure but at developing-nation costs. Malaysia plans to have a knowledge work based society by 2020 when multimedia corridors will crisscross the country.

Companies operating inside the designated MSC zones enjoy the following bill of guarantees from the Malaysian government:

1. Provide a world-class physical and information infrastructure.

2. Allow unrestricted employment of local and foreign knowledge workers.

3. Ensure freedom of ownership by exempting companies with MSC Malaysia Status from local ownership requirements.

4. Give the freedom to source capital globally for MSC Malaysia infrastructure, and the right to borrow funds globally.

5. Provide competitive financial incentives, including no income tax for up to 10 years or an investment tax allowance, and no duties on import of multimedia equipment.

6. Become a regional leader in intellectual property protection and cyberlaws.

7. Ensure no Internet censorship.

8. Provide globally competitive telecommunications tariffs.

9. Tender key MSC Malaysia infrastructure contracts to leading companies willing to use the MSC Malaysia as their regional hub.

10. Provide an effective one-stop agency – the Multimedia Development.

New office buildings are going up all over Kuala Lumpur. If these buildings lie outside the MSC areas of the city, their space might rent at a discount of up to 60% because MSC benefits would technically not be available. I am told this is the case with the building being constructed in the picture below. However, even without the MSC benefits, this building will offer premium, brand-new, office space for cheap when compared to Silicon Valley prices. Plus, it’s right next to a train station.

For more information about the Multimedia Super Corridor visit http://www.msc.com.my/.