Government Grants Malaysia

Malaysian Government Grants and Loans

The Malaysian Government plays a key role in providing a conducive environment for the country’s economic sector and is especially supportive of small and medium enterprises (SMEs). 
Since 2005, the National Entrepreneur & SME Development Council has adopted official definitions and criteria for companies to be classified as a SME. 

CategorySmallMedium
ManufacturingSales turnover from RM300,000 to less than RM15 million
OR 
Number of full-time employees of 5 to 74
Sales turnover from RM15 million and not exceeding RM50 million 
OR 
Number of full time employees of 75 to 199
Services and other SectorsSales turnover from RM300,000 to less than RM3 million
OR
Number of full-time employees of 5 to 29
Sales turnover from RM3 million to not exceeding RM20 million 
OR
Number of full-time employees of 30 to 74
SME Definitions. More details can be found here.

Various initiatives and grants are put in place with a view to stimulating economic growth by uplifting the large contingent of SMEs in many industries and sectors, especially in technology. The recent pandemic has also resulted in the Malaysian Government launching a comprehensive economic recovery plan worth up to RM10 billion. This includes incentives such as wage subsidies, upskilling, tax holidays and others under the Plan Jana Semula Ekonomi Negara or PENJANA for short. 

Here are some grants and programmes that could benefit your company:

1. SME Digitalisation Initiative

A popular initiative especially for technology companies supported by Bank Simpanan Negara (BSN), SME Bank, and Malaysia Digital Economy Corporation (MDEC) of the Ministry of Communications & Multimedia. The SME Digitalisation Initiative is a 50% matching grant of up to RM5,000 per company for the first 100,000 SMEs applying to digitalise their business operations. This initiative is worth up to RM500 million over 5 years.

Eligibility criteria for participation:

  • 60% Malaysian equity
  • Registered and in operation for at least a year 
  • Annual sales turnover requirement
    • RM100,000 if the company has been in operation for a year 
    • RM50,000 for two consecutive years if the company has been in operation for two years.

There are seven areas of a company operations qualify:

  1. Digital marketing/ sales
  2. Electronic point of sales (e-POS) system
  3. Human resource and payroll system / Customer relationship management (CRM)
  4. Procurement
  5. E-commerce
  6. Remote working
  7. Enterprise resource planning (ERP)/ Accounting and tax

Read more about the initiative and apply here.

2. Digital Content Grant by MDEC

Also a PENJANA initiative, tailored towards local digital creative companies involved in developing different types of interactive media content. The aim of this grant is to establish viable ecosystems for the digital content creation industry, develop local creative talents, as well as creating Malaysian-owned or Malaysian-shared intellectual property. 

MDEC has identified several Eligible Project Categories for this grant, which includes the following:

  • Animation 
    • Animated Series
    • Animated Featured Film 
    • Beyond Entertainment
  • Interactive Media
    • Digital Games
    • Gamification 
    • Extended Reality 
    • Beyond Entertainment
  • Innovation in Creative Technology*
    *Only eligible for Development Grant, Production Grant and Co-production Grant.

There are five sub-grants for different stages of production:

  1. Development Grant
  2. Production Grant
  3. Co-production Grant
  4. CREED Grant and 
  5. IP Marketing & Licensing Grant.

Each applicant can only be allowed to apply one project across all categories. Financial assistance received can be used by the applicants for expenses related to the project, such as wages and costs of hardware or software.

Development Grant
This grant is exclusively for projects in the planning phase, which typically involves idea generation, production design, market research and marketing analysis. It is suitable for applicants with new projects or ideas within the Eligible Project Categories. There are several eligibility criteria to meet for prospective applicants, including but not limited to:

  • Company must be incorporated in Malaysia
  • More than 50% of the legal ownership of the applicant is in Malaysia 
  • Project duration of not over eight months

Production Grant
This grant is limited to projects in production stages, i.e., creating, assembling, aggregating, producing or generating content. Examples of production activities include film shooting, game level development, content development, editing, voice over and other activities as per acceptable industry practice. Some of the eligibility criteria for the applicants interested in this grant consist of the following: 

  • Company must be incorporated in Malaysia
  • More than 50% of the legal ownership of the applicant is in Malaysia 
  • Issued and paid up share capital of at least RM 50,000
  • Project duration of not more than 24 months

Co-production Grant
As the title suggests, this grant focuses on financial assistance for projects by Malaysian companies who are co-producing with one or more foreign company(ies). The co-production should have already entered agreement stating relevant rights, responsibilities, milestones, requirements and other related items. Content such as completed animated series or playable games are examples of required output of the project. Part of the list of eligibility criteria to meet for prospective applicants are as follow:

  • Company must be incorporated in Malaysia
  • More than 50% of the legal ownership of the applicant is in Malaysia 
  • Issued and paid up share capital of at least RM 50,000
  • Written confirmation from foreign co-production partner(s) demonstrating financial ability to complete its portion of the project 
  • Animated series applicants has to include an intent of distribution by a broadcaster or distributor
  • Project duration of not over 24 months

CREED Grant
The CREED Grant stands for Creative Industry Export Acceleration and Enterprise Development Grant. It supports established creative content companies and addresses long term industry advancement as well as sustainability. The eligibility criteria for the grant includes the following: 

  • Company must be incorporated in Malaysia
  • More than 50% of the legal ownership of the applicant is in Malaysia 
  • Issued and paid up share capital of at least RM 50,000
  • Demonstrated history of Licensing & Merchandising activities for applicant’s previous IP(s)
  • Proposed project should be:
    • Owned or co-owned by the Applicant or the Applicant has the rights to exploits the project;
    • Have not been published or broadcasted;
    • Have not been submitted to or otherwise produced in connection with other competitions or other government initiative programs
  • Project duration of not more than 60 months

IP Marketing & Licensing Grant
This grant caters to IP creators, specifically with market ready product(s), including IP extension, registration, development of style guide etc. The applicant is expected to have a marketing strategy and its possible outcome, trailer or complete content (animation series or playable games), or the work in progress such as a pilot episode or production bible or a game prototype. Applicants must meet the following criterias to be eligible for this grant: 

  • Company must be incorporated in Malaysia
  • More than 50% of the legal ownership of the applicant is in Malaysia 
  • Issued and paid up share capital of at least RM 50,000
  • Ability to demonstrate two years track record in conceptual development of creative work
  • Project duration of not more than 12 months

Read more about the grant here on MDEC’s website.

3. Global Tech Fund (GTF) by MDEC

This grant address three areas by allocating a GTF for each area:

GTF for Nurturing Global Champions
This fund is directed towards local technology companies with paid-up share capital of at least RM20,000 and 51% Malaysian equity, that are ready to enter the global market or to broaden current global market presence. Applicants for this grant should acquire technology innovation and commercialisation of market-driven products or services. Local technology companies are encouraged to set up a Centre of Excellence. Funding amount is up to 50% of the approved total project, subject to an undisclosed ceiling limit.

GTF for Driving Investments in Research & Development
Focusing on foreign technology companies – business entities incorporated in Malaysia with paid up share capital of at least RM50,000 – for setting up a Centre of Excellence and conducting high value technology innovations or research activities that result in development and commercialisation of a product or service in the global market. The end product or service should also serve as a contribution to the ecosystem development. Funding amount is up to 30% of the approved total project, subject to an undisclosed ceiling limit.

GTF for Catalysing Digital Innovation Ecosystem
Catered towards Technology Accelerators – companies incorporated in Malaysia with paid up share capital of at least RM50,000 with no specification on ownership requirement – that have plans to advance the growth of Malaysian technology startups, as well as contributing to Malaysia’s digital ecosystem in providing mentorships and market access. Technology innovation of the following areas are encouraged to apply:

  • Big Data Analytics
  • Internet-of-Things (IOT)
  • Artificial Intelligence/ Deep Learning
  • Blockchain
  • Cybersecurity
  • Robotics
  • Drone technology
  • Virtual reality/ Augmented reality
  • Other emerging technologies

Applicants should address the desired outcome, aspired impact and benefits of the project, which should attain objectives of the grant. Applicants are also expected to demonstrate business and financial management, including structure, plans and KPIs, throughout the project duration of not more than 24 months. Funding amount is up to 30% of the approved total project, subject to an undisclosed ceiling limit.

One of the requirements for the grant recipients for all three funds is that at least 50% of the project team must comprise Malaysians throughout the proposed project funding duration. For further information, you can read up here or send in an enquiry email to clic@mdec.com.my.

4. Bumiputera Enterprise Enhancement Programme (BEEP) by SME Corp

The BEEP programme is specifically designed to establish buoyant yet aggressive Bumiputera SMEs by providing help in escalating business efficiency, improving product innovation and development, as well as providing access to financial aid. Applicants to this programme are required to have the following items:

  • SME Status Certification 
  • At least 60% Bumiputera equity 
  • Valid business premises licenses from local authorities
  • At least six months in operation.

Those interested may learn more details on SME Corp Website here and e-flyer here.

5. SMEs Go Global Programme by SME Corp

Devised for SMEs looking to introduce or expand their product or service into global markets, especially in high growth industries. Successful applicants for the programme are expected to receive financial assistance of 50% of total project costs with a ceiling limit of RM200,000 on reimbursement basis. Eligible project expenses include service fees for market linkage or experts, rental of sales promotion offices abroad, cost of manufacture of product prototype for international buyers, expenses on supply chain management activities and other related expenses.

Applicants are required to meet the following criteria: 

  • Registered under the Companies Act 1965 (Private Limited Companies or Sendirian Berhad/ Sdn Bhd) or Limited Liability Partnership (LLP) 
  • Malaysian SME Status Certification 
  • At least 60% Malaysian equity
  • Valid business licences from local authorities and operating at valid business premises (subject to business activities)
  • In business operation for at least three years
  • Annual revenue of at least RM3 million

Eligible companies of interest may take a closer read on SME Corp Website here and the programme e-flyer here.

There are two other initiatives which registration is now closed but worth to check out for the next batch:

A. Smart Automation Grant by MDEC (Registration now closed)

The Smart Automation Grant is a critical part of Pelan Jana Semula Ekonomi Negara (PENJANA) under the Malaysian Ministry of Finance, managed by MDEC. This is a matching grant for services SMEs and mid-tier companies to automate processes and move towards digitalisation. Each successful application will receive up to 50% of the total project costs, with a ceiling limit of RM200,000. Successful applicant companies should expect revenue growth and reduced business expenses, process time cycle and/or labour.

Read more about the grant here on MDEC’s website.

B. Business Scale-Up Programme (Biz-Up Programme) by SME Corporation (Registration now closed)

The objectives of this programme is to strengthen SMEs locally and globally by providing business advisory services as well as financial assistance. There are two types of financial aids offered for this programme: 

Matching Grant 
This grant is opened to projects implemented 90 days before the date of submission and is limited to several industries: Industry 4.0, Automation, Digitalisation, Logistics, Retail, Wholesale, Smart Cities, Agarwood and Swiftlets. The maximum amount eligible for financing is 50% of total approved cost with a ceiling limit of RM400,000, allowable for purchase of machineries and systems only. The financial tenure for the project is six months.

Soft Loan
Companies of interest out of the industries listed above may instead apply for a Soft Loan between RM50,000 to RM1 million, with a low interest rate of 4% per annum. The financial tenure for this loan is 10 years including grace period. Applicants are suggested to invest in machineries or softwares, or on working capital of the company such as purchase of goods or raw materials, expenses on packaging etc.

Let us help you 

There may be more grants or programmes provided by the Malaysian Government that suit your business better. While you are focused on planning and managing the future of your company, let us take care of your company secretarial matters here at Quadrant Biz Solutions. Contact us today!

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