SMART AUTOMATION GRANT (SAG)

Propelling SME Digitalisation For The Service Industry

SMEs and mid- tier companies in the services sector are now able to kickstart their digital adoption journey and increase their digital capabilities to continue striving forward in this new norm.

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Download SAG Application Form before 17/09/21

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What Is Smart Automation Grant (SAG)?

SAG is a matching grant for services companies to automate their business processes and move towards digitalisation.

The grant will be used solely to kick start the development and implementation of project by technology to automate the business operations.

Objectives

To future-proof Malaysian companies and ensure their competitiveness in the coming years by assisting them to move up the value chain from a technology frontier in automating their business operations.

To identify pain points, gaps of their business and identify potential solutions to automate their business operations.

Project Duration

Total 4 months duration

Project implementation period is up to 1 month.

Post monitoring to achieve project outcome is up to 3 months.

Application Eligibility Criteria

GENERAL SERVICES SECTOR

The Applicant is required to meet the following criteria at all times and to continuously meet the criteria throughout the project period.

  1. Local company
    • Incorporated in Malaysia under the Companies Act 1965 or the Companies Act 2016;
    • Minimum issued and paid up capital of RM50,000;
    • Minimum of 51% equity held by Malaysian(s). For companies which shareholders are another company, the same rule applies. The checks are limited to three tiers of shareholding.
  2. Enterprises / Sole Proprietorships / Partnerships:
    • Registered under Registration of Business Act 1956;
    • Minimum of 51% owned by Malaysians; and
    • Providing professional services which includes but not limited to Legal, Accounting, Surveying, Engineering, Architectural, Consultation, Management, Employment and Security (Private Agency) Services;
  3. Limited Liability Partnerships:
    • Registered under Limited Liability Partnerships Act 2012;
    • Minimum of 51% owned by Malaysians; and
    • Providing professional services which includes but not limited to Legal, Accounting, Surveying, Engineering, Architectural, Consultation, Management , Employment and Security (Private Agency) Services; ”
  4. In operation for at least 1 year.
  5. Not the subject of liquidation/winding up /bankruptcy order *and has no going concern issue. (*If the Applicant has going concern issue (as reported in their latest audited account, the Applicant to provide a letter of undertaking by the shareholder and/or director of the Applicant to undertake that in the event that their application is approved, the Applicant shall perform its obligations under the terms & conditions to be issued by MDEC and to provide financial support to the Applicant to enable the Applicant to meet its obligations and/or liabilities under the terms & conditions.)
  6. Company director/ shareholder/ partner/ senior management to declare and disclose if there is any close business relationship/close family relationship with any of MDEC’s director or employee.
  7. Company director/ shareholder/ partner/ outsourced partner to declare if they are under any litigation (not applicable for grants under RM 50,000).
  8. Companies with common shareholder/s can only submit application for one company only.
  9. If previously has received any MDEC/government grant, the applicant must demonstrate the completion and success of the funded project/s.
  10. The business nature of the company – to see if it falls under the following categories.
    • Non-technology related service – Registered business activities comprising primarily traditional or non-technology activities from the service sector .
    • Professional services – Registered under Registration of Business Act 1956 or Limited Liability Partnerships Act 2012 or any other relevant Malaysian law or regulation as well as providing professional services which includes but not limited to Legal, Accounting, Surveying, Engineering, Architectural, Consultation, Management , Employment and Security (Private Agency) Service.
 

Application Flow

Step 1

Register now via MDEC website

Step 2

Submit application by the closing deadline via email to [email protected]

Step 3

Completeness Checking

Step 4

Compliance Checking

Step 5

Pitching Session

Step 6

Approval Process

Smart Automation Grant (SAG)

Fill up the form to register your interest and download the application form.

Download SAG Application Form before 17th September 2021.

Consent(Required)

Frequently Asked Questions

1. What is Smart Automation Grant (SAG)?
SAG is matching grant for services companies to automate their business processes and move towards digitalisation.

2. What can it be used for?
The matching grant will be used solely to kick start the implementation of project by adopting technology to automate the business operation. 

3. What are the expected outcomes of SAG?
This matching grant is intended to assist services companies embarking on automation to achieve one of these outcomes: 

  • Increase in revenue. 
  • Savings in business cost. 
  • Reduction of process time cycle. 
  • Reduce man hours. 
  • Create new sources of growth.

4. Who can apply for this grant?

  • The Applicant must be a company with the registered business activities comprising primarily traditional or non-technology activities from the service sector. 
  • The companies from the service sector include Retail, Wholesale, Food and Beverages, Tourism, Logistics, Transportation, Education, Healthcare, Real Estate, Professional Services and Financial Services. The list of the services sector will be regularly updated.

5. What is the criteria for the selection of tech-solution company by SAG applicant?

The Applicant is required to ensure that the technology solution provider (TSP) to be appointed for the implementation of the project shall meet the following criteria at all time of application; and if approved, at all times during the Project Availability Period:

  1. Local TSP: Company incorporated under the Companies Act 1965 or the Companies Act 2016 with paid-up capital of at least RM50,000;
  2. Foreign TSP: Company incorporated under the relevant laws of its country with paid-up capital equivalent to at least RM50,000;
  3. The TSP  is  NOT the shareholder of the Applicant and vice versa;
  4. Successfully deployed digital solutions to at least 10 enterprises which have achieved at least  one of these outcomes:
    • Increase in revenue; 
    • Savings in business cost; 
    • Reduction of process time cycle; 
    • Reduction in man-hours; and/or
    • Create new sources of growth.
  5. Has entered into a written contract or a committed arrangement with Applicant for the development and implementation of the project under the SAG.

6. What are the eligible expenses?

The eligible expenses are the approved project costs that are critical to the project success. 

  • Expenses include: 
    • Cost of IT Hardware or IT equipment 
    • Cost of Software associated 
    • License fee 
    • Process redesign 
    • Testing and certification costs associated with the development of the project. 
    • Training costs associated to the project 
  • Non-eligible expenses: 
    • Salary 
    • Outsourcing outside the country 
    • Calibration (deemed as part of maintenance) 
    • Any form of taxes 
    • Expenses in obtaining certification & accreditation 
    • Maintenance of plant / equipment 
    • General purpose computers and peripherals 
    • Mobile phones 
    • Tablets, laptops and personal computer 
    • Camera 
    • Furniture or any office interior materials. 
    • Travelling expenses 
    • Coaching and mentoring 
    • Utilities 
    • Office rental 
    • Audit fee 
    • Secretarial fee

7. What is the amount of this grant?
 

The amount of matching grant which will be awarded to each successful applicant for up to fifty percent (50%) of the total project cost or subjected to a ceiling limit of RM200,000. 

8. What is the reimbursement process?
 

The matching grant will be reimbursed based on achievement of the agreed milestone deliverables, which will be limited to 2 times payments as follows;

  1. 1st Payment – Implementation Costs
    • 50% of the approved grant amount or up to 50% of the actual cost incurred whichever is the lower, in respect of the payment made by the SAG Recipient to the technology solutions provider/s (“TSP”) in relation to the implementation of the project. 
    • Supported with the following deliverables, completed and submitted to the satisfaction of MDEC by the set timeline. 
      • Written engagement commitment of SAG project implementation between the SAG Recipient and the TSP;
      • User Acceptance Test document;
      • Demonstration of project implementation; and/or
      • Such additional information and/or other documents as may be requested by MDEC. 
  2.  2nd / Final Payment – Remaining Costs
    • Balance of up to 50% of the approved grant amount or up to 50% of the actual cost incurred whichever is the lower, in respect of the payment made by the SAG Recipient to the TSP in relation to the implementation of the project, based on the final outcome achieved. 
    • Supported with the following deliverables, completed and submitted to the satisfaction of MDEC by the set timeline;
      • A report (in such format as may be specified by MDEC) and supporting documents indicating the completion of the Project ie. Certificate of Completion by TSP and achievement from one of these outcomes:
        • increase in revenue;
        • Savings in business cost;
        • Reduction of process time cycle;
        • Reduce man-hours; 
        • Create new sources of growth; and/or
      • Such additional information and/or other documents as may be requested by MDEC.

9. What are the consequences in the event the grant recipient did not fulfil the grant’s obligation?
 

The grant shall be cancelled or terminated if the SAG recipients: 

  1. Fails to submit a claim for disbursement by specified due dates or upon expiry of the specified availability period for the incentive; 
  2. Fails to deliver any of the deliverables specified in the terms & conditions issued by MDEC; or
  3. Fails to meet any eligibility criteria for any reason whatsoever during the specified availability period for the incentive which shall commence from the date of the terms & conditions issued by MDEC; and/or
  4. Fails to perform or comply with or commits a breach on any of the obligations specified in the terms & conditions issued by MDEC.

10. What are the consequences in the event the grant is being cancelled or terminated?
 

In the event of breach and/or the incentive is being cancelled or terminated, the Applicant: 

  1. May be subject to clawback on the amount already disbursed or such other smaller amount as MDEC may specify; and/or
  2. MDEC has the right to blacklist the Applicant.

11. How to apply for the grant?
 

This matching grant can be applied through Direct Application

  1. Interested business owners can register at mdec.my/sag.
  2. The submission shall comprise of a duly completed application form with other relevant documents as requested and email to [email protected]
  3. Should you have any enquiries with regards to the application, kindly contact MDEC Client Contact Centre at 1-800-88-8338.

12. Application Document

Mandatory documents to be submitted for the application are as follow:

  1. Fully completed and signed SAG application form;
  2. Following documents:
    • Applicable for Company only: Incorporated more than 1 year:  Company’s financial statements (Copy of latest Audited Accounts and latest to-date Management Accounts). A copy of the latest audited account must be dated and certified by the Commissioner of Oath/ Company’s Secretary / Company’s Auditor. If the Applicant is unable to do so, the Applicant is required to provide justification. (e.g., previously dormant);
    • Applicable for Enterprises / Sole Proprietorships / Partnerships/Limited Liability Partnerships which providing a professional service which includes but is not limited to   Legal, Accounting, Surveying, Engineering, Architectural, Consultation, Management, Employment and Security (Private Agency) Services: The firms’ latest tax return and supporting management accounts.
  3. Applicable For Company Only: Board of Director Resolution on the appointment of the authorized signatory as per template;  
  4. Proof of written contract or a committed arrangement with technology solution provider for the development and implementation of the project. Note:  The written contract should be signed by both Applicant and the technology solution provider i.e.:  Letter of Award, Letter of Commitment, Master Services Agreement etc. which should include the breakdown costing and scope of work. The quotation is not considered as a written contract;
  5. Proof of project completion (i.e: closure letter from the ministries/agencies). For Applicant applying or has previously received a grant from MDEC/government (if applicable);  
  6. CCRIS Report for top 5 shareholders; 
  7. Supporting document in relation to the Technology Solution Provider (TSP):  
    • For local TSP: Latest SSM Search Report from the link: https://www.ssm-einfo.my/ (valid within two months from the date of submission); 
    • For foreign TSP: Document/report equivalent to SSM report as evidence of incorporation and proof that the paid-up capital is equivalent to at least RM50,000.00;
  8. Proof of successful deployment of the digital solutions to at least 10 enterprises that have achieved one of these outcomes: 
    • Increase in revenue; 
    • Savings in business cost ;
    • Reduction of process time cycle;
    • Reduce man-hours; and/or
    • Create new sources of growth.

13. I am a Malaysian owner but my company is registered abroad. Can I participate?

No, as the SAG eligibility criteria is incorporated under Malaysia laws.

14. How do I submit my application if I own multiple companies?

SAG is allowed once for companies with the same shareholding

15. What is MDEC’s role in this Smart Automation Grant ?

MDEC is the Programme manager for Smart Automation Grant.

16. When will I know the outcome of my submission? How will I be notified?

MDEC will acknowledge receipt of the complete submission in term of application form and supporting documents.

MDEC verifies application based on the eligibility criteria and will notify the applicants via email to participate in the pitching session.