The MADANI Smart Automation Grant

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Smart Automation Grant (SAG): Boost Your Business with Government Support

The SAG was introduced under the MADANI Economy initiatives in August 2023 with the main objective to help businesses automate and digitalise their operations, in order to boost their productivity, efficiency and competitiveness. 

The SAG is specifically aimed at small and medium enterprises (SMEs) and mid-tier companies in the manufacturing and services sectors. These businesses are often the backbone of the Malaysian economy, but they often face challenges in adopting new technologies due to limited resources and expertise. The SAG provides financial support to businesses to help them overcome these challenges and invest in smart automation solutions. This can include hardware and software costs, consultancy and training costs and project management costs. 

The SAG is also designed to promote the adoption of specific smart automation technologies, such as robotics, artificial intelligence and the Internet of Things (IoT). These technologies are transforming the way businesses operate, and the SAG can help Malaysian businesses to stay ahead of the curve.

The key feature of the SAG is that it is a matching grant with a matching basis of 70:30 based on eligible expenditures, with a maximum grant of Ringgit Malaysia One Million (RM1,000,000) per company. 



Eligible Applicants

In order to be eligible for the SAG, businesses must:

  • Be incorporated under Companies Act, 1965/2016
  • Have equity ownership of at least 51% Malaysian
  • Possess a valid Business License from a local authority
  • Engage in the following activities:
    1. Manufacturing activity in compliance with the Industrial Co-ordination Act, 1975 and possess a valid Manufacturing License (ML) from the Ministry of International Trade and Industry (MITI) or a Confirmation Letter for exemption from ML from the Malaysian Investment Development Authority (MIDA); or
    2. Services activities that is governed/supervised by relevant ministries/ agencies in the following areas:
      • Hotel & tourism;
      • Private Healthcare;
      • Private Education;
      • Oil & Gas Services;
      • Global Establishment - Principal Hub/Global Services Hub;
      • R&D Activities;
      • Logistics Services; or
      • Other Services - Ship building, ship repair, Green technology project for business purpose, Sterilisation services, Digital infrastructure, Maintenance, repair & overhaul for aerospace.

In order to be eligible for the SAG, businesses must be:

  • Eligible for Micro Small and Medium Enterprises:
    1. Micro Enterprises across all sectors: Sales turnover of less than RM300,000 or less than 5 full-time employees.
    2. SMEs for the following sectors:
      Manufacturing  Services
      • Sales turnover note exceeding RM50 million; or
      • Employees not exceeding 200
      • Sales turnover note exceeding RM20 million; or
      • Employees not exceeding 75
  • In operation for at least three (3) years
  • Not been approved for the Industry4WRD Intervention Fund (IIF), Smart Automation Grant from MIDA and Malaysia Digital Economy Corporation (MDEC), and Domestic Investment Strategic Fund (DISF) for modernisation and upgrading of machine and equipment
  • Meet at least two (2) of the Committed Deliverables (Appendix I) :

    No.  Committed Deliverables  Sector
     1.  Increase of Malaysian skilled workers with a basic salary of minimum RM5,000.00 / month  Manufacturing / Services
     2.  Reduction in Man Hours  Manufacturing / Services
     3.  Increase in Production Volume  Manufacturing
     4.  Quality Improvement (Reduction in Defect Rate)  Manufacturing
     5.  Increase in Services Delivery / Sales  Manufacturing / Services
     6.  Reduction of Man Hours in Delivering Services  Manufacturing / Services
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Eligible expenditures

Eligible expenditures

The eligible and non-eligible expenditures under the SAG are summarised as follows:

Eligible expenditures  Non-eligible expenditures
Automation machine / equipment / software (*) that are used directly in the overall value chain of manufacturing and services activities.

*The software that is embedded in machinery/equipment or used to perform specific functions related to the company’s core activity.
  • Purchase or rental of land / building / office / vehicles / furniture 
  • Rental of automation machine/ equipment/ software
  • Purchase or rental of second-hand or refurbished automation machinery / equipment / software
  • Maintenance and repair costs including renovation of the premise
  • Wages paid to employees
  • Employee benefits programs
  • Legal and stamp duty fees
  • InsuranceCollateral or loan including its interest paid for purposes other than smart automation
  • Office expenses and supplies including general-purpose computers & peripherals and mobile phones
  • Utility expenses
  • Advertising and marketing expenses
  • Bank charges, cost of guarantees and similar charges
  • Debts and debt service charges 
  • Any form of taxes and duties
  • Fines, financial penalties and expenses of litigation
  • Conversion cost, charges and exchange losses

**This list is not meant to be exhaustive and will be reviewed from time to time.

The company is not allowed to dispos of any machinery / equipment / software within the grant period.

Project duration

  • The project must be completed within 18 months from the effective date of the grant period, which begins on the date MIDA issues the Acknowledgement Letter.
  • Any unutilised grant amount after 18 months from the effective date of the grant period will be withdrawn. (no extension of grand period will be considered).
  • Expenditures incurred prior to the issuance of the Acknowledgement Letter by MIDA will not be eligible for consideration or reimbursement.

Application Process

  1. Application
    • Submission of application together with a non-refundable evaluation fee of RM3,000.00 to MIDA.
  2. Review and decision process
    • MIDA will review the application and Acknowledgment Letter will be issued if required information is complete. 
    • MIDA will inform the decision made by the Approval Committee and it is final.
  3. Obligation after Approval
    • Successful applicants must sign a grant agreement with MIDA. 
    • The signed Grant Agreement (including stamping) must be returned to MIDA within 30 days of the offer letter. 
    • Failure to meet this deadline will result in grant offer cancellation with no extension requests considered. 
    • The awarded company must undertake the approved project and submit disbursement claims within the grant period.
  4. Grant disbursement
    • MIDA will conduct an audit and report the audit findings to the Jawatankuasa Penyelarasan & Pembayaran Geran (JPPG) for disbursement decisions. 
    • After JPPG approval, MIDA will disburse the grant to the awarded company. 
    • If companies use Hire Purchase Financing through financial institutions, the grant will be disbursed to these institutions.

Effective Date of Application

The effective date of the SAG is from 10 November 2023 to 31 December 2023 (subject to the availability of funding and allocation by the Government).

The applications should be made online at


The Smart Automation Grant is a valuable opportunity for businesses to automate and digitalise their operations. By automating repetitive tasks, businesses can free up their staff to focus on more strategic and value-added activities. This can lead to significant improvements in productivity, efficiency and profitability.

If you are a business owner interested in the Smart Automation Grant, we encourage you to visit the MIDA website for more information. Please feel free to reach out to us and we will be glad to assist you to submit your application today.