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GRANT & INCENTIVE

 

Now day, a lot of Ministry and Agencies give the grant to help SME Company growth and Boost their sales. Grant was a gifted fund from government. There is a lot of grant which is for purchasing of new machinery / technology, acquiring a new technology, R&D, acquiring a testing standard, training and many more. These grants were given by government on selected ministry and statutory body. This Grant is useful for manufacturer because can help you reducing your capital for expansion. The grant can up to millions of ringgit depend on your cost.

Beside grant for manufacturing sector, government also support services sector (Eg. ICT, Greentech, R&D, Logistic etc) in term of R&D and Commercilization Grant. Even you only have an idea of business, government have access to support it.

Maximum Limit Amount          

RM100,000 - RM10,000,000

Repayments                              

Non

Interest Rate                          

Non

Speed                                      

4-5 Months

Types of Grant

The government of Malaysia under several ministries offered grants to the Malaysian and also Foreigners that looking forward to set up, expand, diversify and modernize their business in Malaysia. Below are the ministries that offered the grant:

 

  • MSC (Multimedia Development Corporation)

  • MATRADE (Malaysia External Trade Development Corporation)

  • MBC (Malaysian Biotechnology Corporation)

  • Ministry of Tourism Malaysia

  • Shell Malaysia Sustainable Development (SD) Grants scheme

  • CIP (Cradle Fund Sdn Bhd )

  • MTDC (Malaysian Technology Development Corporation)

  • MOSTI (Ministry of Science, Technology and Innovation)

  • MDEC (Multimedia Development Corporation)

  • NEF (New Entrepreneur Foundation)

  • MIDA (Malaysian Investment Development Authority)

  • SME Corp (SME Corporation Malaysia)

  • MPC (Malaysia Productivity Corporation)

 

List of Grants, Incentives and Manufacturing License

1. DOMESTIC INVESTMENT STRATEGIC FUND (DISF)

From MIDA (Malaysian Investment Development Authority)

Objective/Activity

Matching grant 50% of eligible amount up to RM 5 million (3 Years) as follows:

  1. For training and R&D activities

  2. To undertake outsourcing activities

  3. To comply with international standards: and

  4. For licensing / purchasing of technology

 

Manufacturing Sector:

  • Aerospace;

  • Medical Devices;

  • Pharmaceutical;

  • Advanced Electronics;

  • Machinery & Equipment

  • Other industries, on a case by case basis

Services Sector:

  • Design & Development

  • Research & Development

  • Testing / Calibration

  • Quality ? Standard Certificate

  • Engineering Services

  • Technical & Skill Training

  • Logistic (3PL)

  • ICT for Automation

  • Integrated Green Technology Project.

Criteria

  • Incorporated under Companies Act 1965

  • New manufacturing/services with at least 60% Malaysian equity;

  • Existing companies with at least 60% Malaysian equity undertaking reinvestment (expansion, modernization, diversification);

  • Got manufacturing license unless services sector

2. HIGH IMPACT STRATEGIC FUND

From MIDA (Malaysian Investment Development Authority)

Objective/Activity

For investment more then 100 million

1.      For training and R&D activities

2.      To undertake outsourcing activities

3.      To comply with international standards: and

4.      For licensing / purchasing of technology

Open for all Manufacturing And Service Sector. MIDA will see on Impact of Investment ROI and project potential.

Criteria

  • Incorporated under Companies Act 1965

  • New manufacturing/services OR existing companies undertaking reinvestment (expansion, modernization, diversification);

  • Have manufacturing license 

 

Maximum RM10 million for each section unless services sector

From SME Corp (SME Corporation Malaysia)

Objective/Activity

BAP is an integrated assistance program to enhance capabilities of small and medium enterprises (SMEs) through business advisory and financial support. The Program supports a wide range of capacity building initiatives to assist SMEs to grow their businesses locally and abroad.

 

For Productivity & Automation (Machine)

For Certification

For Branding & Promotion

For Packaging & Product Packaging

For Product Development

For ICT

Criteria

  • At least 60% Malaysian equity

  • Business license from the Local Authority

  • At least 6 months in operation and full time business operator

  • Committed to undergo SCORE within 3 months from the date of approval

  • NOT ELIGIBLE for Public Listed Companies in the Main Board / Secondary Markets / Large Firms, MNCs, GLCs, MoF Inc. & State Owned Enterprises Companies AND their subsidiaries.

  • Business entities (Sole Proprietors / Partnerships / Sdn Bhd)

 

Maximum RM1million (2018)

Objective/Activity

• To help youth entrepreneur to expand their business.

Criteria

• Youth entrepreneurs

• Aged 18 to 40 years old

• Full-time / part-time entrepreneurs

• Individuals / Business Entities (Sole Proprietors / Partnerships /

Sdn Bhd)

 

Maximum RM50,000

Objective/Activity

• To help youth entrepreneur to expand their business.

Criteria

  • Youth entrepreneurs

  • Aged 18 to 40 years old

  • Full-time / part-time entrepreneurs

  • Individuals / Business Entities (Sole Proprietors / Partnerships /Sdn Bhd)

 

Maximum RM50,000

From Cradle Fund Sdn Bhd

Objective/Activity

Cradle Investment Programmed 300 (CIP300) is a new conditional grant product by Cradle which was launch in May 2017 following from our announcement in December 2016 to revamp our long standing CIP Products, CIP Catalyst and CIP500 to better suit Malaysia’s thriving start-up eco-system.

The CIP300 is a pre-commercialization programmed that provides a conditional grant and value added assistance up to RM300 000 for entrepreneurs to kick-start innovative technology based start-ups to enhance and commercialize their products or services.

 

The purpose of this programmed is to assist early stage entrepreneurs to:

1. To convert market validated prototype to a commercial product/service

2. To further enhance existing product/service

3. To commercialize the product/service 

CIP300 helps address the funding gap that exists for early stage businesses at the pre-commercialization stage

For ICT

-       Mobile/Wireless Tech

-       Creative Multimedia

-       Shared Service

-       Hardware Design

-       Software Development

-       Interned Based Business

 

For Non-ICT

-       Bio Technology

-       Advance Material

-       Green Technology

-       Advance Manufacturing

-       High Tech Consumer

 

Others

-       Semi-Conductor

-       Life Sciences

-       Clean Technology

Criteria

  • Malaysians aged 18 above

  • Individuals / Business Entities (Sole Proprietors / Partnerships / Sdn Bhd)

  • Must have at least 2 Member

  • Must incorporated less than 3 years

  • At least 51% Malaysian Equity

  • Company must have minimum RM10,000 of Paid Up Capital

  • ·Revenue less than RM3 million 

Maximum RM 300,000 (24  Month)

From MOSTI (Ministry of Science, Technology and Innovation)

Objective/Activity

Innovation contributes to productivity, economic growth and societal wellness. It can be the recombination, fusion or integration of technologies that lead to new products

 

InnoFund focuses on the following research areas:

 

Life Sciences, Computer Sciences and Information and Communication Technology (ICT), Agriculture Sciences/Agricultural Engineering, Environmental Sciences, Advanced Materials Science, Chemical Sciences, Physical and Mathematical Sciences, Engineering, Medical and Health Sciences, and Social Sciences and Humanities

Criteria

  • Individual

  • Sole Proprietorship/Partnership

  • Micro, Small and Medium Enterprises

  • Registered Associations/ NGOs

  • Registered Cooperatives

  • Community Group

 

Maximum RM500,000 (18 month)

From MTDC (Malaysian Technology Development Corporation)

Objective/Activity

  • CRDF 1 is a funding for the commercialization of R&D output from

  • public and private University (PPU) / Government Research Institute

  • (GRI) by a Spin-Off (“Syarikat Terbitan Universiti, STU”) or a Start-Up company.

  • CRDF 1 is designed to provide funding to enable spin-offs and start-ups to prove their technology’s readiness to be commercialized and to explore the market acceptance before receiving additional funding.

Criteria

  • Local SME 

  • Incorporated under Companies Act 1965

  • Minimum 51% Malaysian-Owned

  • Technology must be under MOSTI List

  • R&D must be successfully and available

 

Maximum RM500,00 or 70% of the eligible expenses

From MTDC (Malaysian Technology Development Corporation)

Objective/Activity

CRDF 2 is a funding for the commercialization of any local R&D by SME

Criteria

  • Local SME;

  • Manufacturing (Sales turn over < RM50 million OR fulltime worker <200;

  • Services (Sales turn over < RM20 million OR fulltime worker <75;

  • Incorporated under Companies Act 1965

  • At least 51% Malaysian-owned

  • Technology under MOSTI list

  • R&D must be successfully and available

Maximum RM4,000,000 OR 70% of eligible expenses.

From MTDC (Malaysian Technology Development Corporation)

Objective/Activity

CRDF 3 is a grant for the commercialization of any local R&D by a

‘non-SME’

Criteria

  • Non-SME (Large Companies)

  • Incorporated under Companies Act 1965

  • At least 51% Malaysian-Owned

 

Maximum RM4,000,000 OR 70% of eligible expenses.

From MTDC (Malaysian Technology Development Corporation)

Objective/Activity

To facilitate eligible Malaysian companies in the acquisition of foreign technologies for immediate incorporation into the company’s manufacturing activity. TAF’s partial grant enables companies to avoid expensive and often risky technology development stages. The acquisition of technology could be in the form of acquiring know-how / Intellectual Property (IP) exploitation / rights / blueprints via one of the

following methods:

 

  • Licensing of technology

  • Outright purchase of technology

Criteria

  • Local SME;

  • Manufacturing (Sales turn over < RM50 million OR fulltime worker <200;

  • Services (Sales turn over < RM20 million OR fulltime worker <75;

  • Incorporated under Companies Act 1965

  • At least 51% Malaysian-owned

  • Technology under MOSTI list

  • Technology provider must  not hold any equity in the applicant’s company

 

 

Licensing – RM2.8 million or 70% of eligible expenses

 

Purchase – RM1.2 million of 50% of eligible

From MOSTI (Ministry of Science, Technology and Innovation)

Objective/Activity

To tackle strategic issues that will provide long term solutions, thus, ensuring commercialization of new R&D products to spur economic returns for the country.

This fund covers pre-commercialisation stage with the technology readiness level (TRL)

 

to tackle prioritised issues that need improvement of societal wellbeing.

 

This fund covers precommercialisation stage with the technology readiness level (TRL) 6

 

-          Sector

•      Water, Food, and Energy Nexus;

•      Green Growth for Sustainable Development; and

Medical and Healthcare.

Criteria

  • Small and Medium Enterprises

  • Government Research Institutes (GRI)

  • Government Science, Technology and Innovation Organisation (Government STI organisation)

  • Government Science, Technology and Innovation Organisation (Government STI organisation) and Public and Private Institutes of Higher Learning (IHL).

 

Maximum RM1,000,000 - 3,000,000 (24 month)

From MATRADE (Malaysia External Trade Development Corporation)

Objective/Activity

Assist the small and medium enterprises (SMEs), service providers and trade & industry associations/chambers of commerce & professional bodies in undertaking export promotional activities. Companies can apply for a reimbursable grant on the eligible export promotional activities undertaken.

 

Oil-Gas, Aerospace, Logistic, Legal, Accounting, Franchising, Business Service, Construction, MTO, ICT, EMS, Maritime, Education, Health Care, Manufacturing (Need to have Manufacturing License)

Criteria

  • Incorporated under Companies Act 1965

  • At least 60% Malaysian equity

  • In operation at least 1 year

  • Not government link companies

  • Register with Matrade

  • Exporting Malaysia Product / Service

  • Must Be Malaysian Brand (Made in Malaysia)

 

RM 5 Million for period of 3 Years

From TERAJU

Objective/Activity

Skim Permulaan Usahawan Bumiputera

(SUPERB) provides grants up to RM500,000 to support innovative and creative business ideas

 

 

Sector:

  • Communications, Content & Infrastructure

  • Electronics & Electrical

  • Wholesale & Retail

  • Palm Oil & Rubber

  • Oil, Gas & Energy

  • Financial Services

  • Business Services

  • Healthcare

  • Agriculture

  • Education

  • Tourism

  • Any other sector with elements of technology, innovation and/or creativity

Criteria

  • Malaysian Bumiputera 18-40 years.

  • New enterprenuer or an enterprenuer sekking for 2nd chance

  • If company need to have at least 60% Bumiputera equity

  • Companies less than 3 years

From MATRADE (Malaysia External Trade Development Corporation)

Objective/Activity

The Market Development Grant (MDG) is a financial support facility in the form of a reimbursable grant to assist Malaysian Small and Medium Enterprises (SMEs), Professional Service Providers, Trade & Industry Associations, Chambers of Commerce and Professional Bodies in undertaking eligible export promotional activities.

Criteria

  • Incorporated under Companies Act 1965

  • At least 60% Malaysian equity

  • In operation at least 1 year

  • Not government link companies

  • Register with Matrade

  • Exporting Malaysia Product / Service

  • Must Be Malaysian Brand (Made in Malaysia)

  • Maximum RM200,000

From MOSTI (Ministry of Science, Technology and Innovation)

Objective/Activity

  • To reduce failure (valley of death) between pre commercialization and commercialization

  •  Untuk increase readiness of product for actual production and sales.

  • Open to all sector but MOSTI will see the impact of investment, ROI and project potential.

Criteria

  • minimum of 51% equity held by Malaysians.

 

  • RM500,000 (18 Month)

From MPC (Malaysia Productivity Corporation)

Objective/Activity

Industry4WRD Readiness Assessment (Industry4WRD-RA) is a comprehensive programme to help firm assess their capabilities and readiness to adopt Industry 4.0 technologies and processes. The assessment uses a pre-determined set of indicators to understand their present capabilities and gaps, from which will enable firms to prepare to prepare feasible strategies and plans to move towards Industry 4.0. The Industry4WRD-RA will help firms to:

Determine their state of readiness in the adoption of Industry 4.0 technologies

Identify the gaps and areas of improvement for Industry 4.0 adoption as well as opportunities for productivity improvement and growth and

Develop feasible strategies and plans to perform outcome-based intervention projects

Criteria

  • Incorporated under Companies Act 1965

  • Only for SME Company

  • At least 60% Malaysian equity

  • Obtain Manufacturing License & Business License

  • Grant of maximum RM 500,000 if success or; Tax deduction of RM27,000 if not success.

Guidelines and Benefit of Getting a Manufacturing License.

Manufacturing License was a license given for manufacturer that comply the conditions which is paid-up capital plus accumulate profit in above RM2.5Mil OR Full-time workers must be at least 75 peoples. Many of the companies not aware about it and also not fulfill the condition thus do not apply it. However, for those manufacturing that do not match the condition, can get the Exemption License of Manufacturing License where enjoying same benefit as Manufacturing License.

 

Nowadays, the application become stricter and the form was so think to fill up and it very easy to get rejected if form is not completely fill up.

Below is the benefit of getting a Manufacturing License OR Exemption Letter from Manufacturing License:-

  • Can apply for Duty Tax and Sales Tax Exemption for Raw Materials, equipment, machinery and spare parts that directly used in manufacturing;

  • Can apply the grant with Government and Statutory Body;

  • Can register with Ministry of Finance as their suppliers;

  • Easy to work and get help from MITI on any kind of issue; and

  • You can apply the Expatriate Post (DP11).

Below is Sample of Miti Manufacturing License

*Note: Exempted Letter also enjoying the same benefit as MITI Manufacturing License

Tax Incentive 

Incentive (Income Tax Exempted) are given to the manufacturer that producing the products that listed in promoted list. This applicable only for the new products that manufactured less then 1 year. The incentive consists of Pioneer Status (PS) or Investment Tax Allowance (ITA). Both of it are unique and can delp manufacturer a lot in saving their money. PS are income tax exemption up to 70% from statutory income form their project cost for 5 years.

The Promotion of Investment Acts, 1986 provides for the companies proposing to manufacture promoted products or engage in promoted activities to apply for Pioneer Status or Investment Tax Allowance. The incentive also will be given to the selected services sector.

Criteria

  • Posses a Manufacturing License (For Manufacturer Only) or Letter of Exemption from Manufacturing License

  • Malaysian equity ownership at least 60%

  • Malaysian owned companies that are already in production not more than one year from date of application received.

  • Participated in a promoted product activity

  • Posses a acceptable ratio Value Added (VA), Managerial, Technical and Supervisor (MTS),R&D Expanditure and Science and Technology (S&T).

Pioneer Status

Income tax exemption of 70% - 100% of statutory income for 5 to 10 years. Unabsorbed capital allowances and accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer status of the company.

Investment Tax Allowance

An allowance of 60% - 100% on qualifying capital expenditure (factory, plant, machinery or other equipment used for the approved project) incurred within 5 to 10 years from the date the first qualifying capital expenditure is incurred.

Noted

A company approved with a Pioneer Status certificate can enjoy income tax exemption between 70% - 100% of statutory income for 5 to 10 years, whereas for Investment Tax Allowance, a company can get allowances between 60% - 100% on qualifying capital expenditure incurred within a period of 5 to 10 years.

For projects with longer gestation period and high capital expenditure, it would be more beneficial to opt for Investment Tax Allowance. Companies should study the options before applying either for Pioneer Status or Investment Tax Allowance.

Please check you List of Promoted Activity and Products here.

PROMOTED PRODUCT AND ACTIVITY
There are 5 types of categories promoted activity and products for incentive which stated as below:
  1. List of Promoted Activity and Products - General Activities
  2. List of Promoted Activity and Products - High Technology Companies
  3. List of Promoted Activity and Products - Small Scale Companies
  4. List of Promoted Activity and Products - Selected Industries
  5. List of Promoted Activity and Products - Reinvestment
Please find your products or activity in the list above. Please do not hesitate to contact us if you have any difficulties in finding your categories. 

Special Tax Incentive (Until year 2020) 

ACA (Automation Capital Allowance)

CURRENT POSITION

Incentives for manufacturing companies in the form of Accelerated Capital Allowance (ACA) and Automation Equipment Allowance are currently given to the following categories:

 

First Category: for high labour Intensive industries (such as rubber products, plastics, wood, furniture and textiles), an automatic capital allowance of 200% (ACA of 100% and AEA of 100% is provided on the first RM4 million of qualifying capital expenditure incurred for the years of expenditure incurred for the years of assessment 2015 to 2017 (Budget 2015); and

 

Second Category: for other industries, automation capital allowance of 200% (ACA of 100% ane AEA of 100%) is provided on the first  RM2 million of qualifying capital expenditure incurred for the years of assessment incurred for the years of assessment 2015 to 2020 (Budget 2015).

Proposal

It is proposed that the incentive period for the First category be extended for another 3 years.

(Effective for application received by Malaysia Investment Development Authority (MIDA) from 1 Jan 2018 to 31 Dec 2020)

Guideline on application

How is Works

 

If you are so keen to know your eligibility, please do contact as for the pre-qualification checking. We will advise the best rant that suited you.