What is SAG?

The Smart Automation Grant was introduced in the National Economic Recovery Plan or Pelan Jana Semula Ekonomi Negara (PENJANA) in June 2020.

The Smart Automation Grant will be given on a matching basis (1:1) based on eligible expenditures, up to a maximum grant of Ringgit Malaysia One Million (RM1,000,000) per company.

The main objectives of the Smart Automation Grant are:

  • To automise and digitalise operations, production and trade channels

  • To reduce reliance on low-skilled foreign workers

  • To improve efficiency in the manufacturing and services sector

  • To enhance SMEs competitiveness at international level
  • To be aligned with the National Policy on Industry 4.0
  • To boost Domestic Investment 


VLAN Digitalisation Services

What are the eligibility criteria?

  • Incorporated under the Companies Act, 1965/ 2016.
  • Malaysian owned (at least 51%)
  • Possesses a valid Business License
  • The company must engage in the following activities:
    1. Manufacturing activity in compliance with the Industrial Co-ordination Act, 1975; or
    2. Service activities which must be regulated by specific acts/ regulations or governed by relevant ministries/ agencies
  • Eligible for SMEs and MTCs only
      Manufacturing Services
    SME Sales turn over not exceeding RM50 million or Employees not exceeding 200 Sales turn over not exceeding RM20 million or Employees not exceeding 75
    MTC Sales turn over form RM50 million to RM500 million Sales turn over from RM20 million to RM500 million


  • In operation for at least 12 months
  • Meet at least one of the Committed Deliverables

Eligible Expenditures

  1. Eligible expenditures refer to the automation machine/ equipment/ software that are used directly in the overall value chain of manufacturing or services activities.
  2. Non eligible expenditures:
    • Purchase or rental of land/ building/ office /vehicles /furniture
    • Rental of automation machine/ equipment/ software
    • Purchase or rental of second hand or refurbish automation machinery/ equipment/ software
    • Maintenance and repair costs including renovation of premise
    • Wages paid to employees
    • Legal and stamp duty fees
    • Insurance
    • Collateral or loan including its interest Paid for purpose other than smart automation
    • Office expenses and supplies including general purpose computers & peripherals and mobile phones
    • Utility expenses
    • Research & development expenses
    • Advertising and marketing expenses

Application Process

  1. Application for Smart Automation Grant is submitted to MIDA.
  2. MIDA will then evaluate the application and invite the eligible applicant to present their proposal at a pitching session in MIDA.
  3. Eligible applicant will present (pitching session) their proposal to the Smart Automation Grant Approval Committee (SAGAC) at MIDA
  4. Once approves, the company will receive the approval letter and sign a grant agreement with MIDA
  5. Awarded company has to purchase and install the automation machine/ equipment/ software.
  6. Awarded company will need to apply to MIDA for the disbursement of grant within 6 months from approval date.
  7. MIDA will conduct an audit visit and report the audit findings to the Committee on Coordination & Disbursements of Grants (JPPG).
  8. Once approved by JPPG, MIDA will disburse the grant to the awarded company. For companies using Panel Banks, the grant will be disbursed to the selected Panel Banks.


*Note: Company may apply for hire purchase financing from the Panel Bank to purchase the automation machine/ equipment/ software, and use the MIDA Approval Letter as a supporting document.