Don't miss out
Subscribe to QuickBooks for only
$1/month for 3 months
Don't miss out
Claim now
April Sale
Buy now and pay only $1/month
for your first 3 months
March into savings Don't miss out!
$1 /monthfor 3 months
Track your expenses as you go and save 11 hours of admin per week
QuickBooks Online $1 /monthfor 3 months
Start fresh this new year
with QuickBooks Online
$1 /monthfor 3 months
Sale ends soon. Don't miss out, sign up today
$1 /monthfor 3 months
Start fresh this new year
with QuickBooks Online
$1 /monthfor 3 months
for 3 months
for 12 months
When purchased in bundles of 10
50 %off for 3 months
50 %off for 12 months
  • Invoices
  • Expenses
  • Reports
A SME owner’s Guide: SME Digitalisation and other Government Grants for Businesses in Malaysia
Starting a business

A SME owner’s Guide: SME Digitalisation and other Government Grants for Businesses in Malaysia

Some small and medium-sized enterprises (SMEs) may find themselves in need of financial assistance from time to time, particularly over the last few years due to the COVID-19 pandemic. Some of this assistance may be focused on recovering from a period where the income was low, or simply, to help expand and keep building the business. 

That’s why the Malaysian government launched multiple grants to enhance businesses. These grants were created to support the growth of the businesses and smooth marketing activities to help them cope with financial burdens. 

If you're a small or medium-sized business owner in Malaysia, you may just qualify for the SME grants offered by the Malaysian government. In this article, you'll discover everything you need to know about the SME digitalisation grant and other business grants your government offers. 

Why You Should Get A Business or Startup Grant For Your Small Business 

Business and startup grants are government funds given to your business to help it grow and stimulate the economy. The goal is to cover your marketing costs, encourage digitalisation, and help maintain competition in the evolving digital economy. The added benefit of using a business grant is that it is non-repayable. 

Many startup businesses may start out their business using borrowed funds from friends and family, or even use their savings. But these funds are not always very reliable and may run out quickly. 

When this happens, your plans for expansion and development can quickly be put on hold. The worst-case scenario is that your business may be shut down due to insufficient funds. With a truly good business plan, a government grant will help bring your company to new heights. 

SME Digitalisation Grant 

It's no secret that the business world is constantly changing as the digital world evolves. Many companies take to creating online platforms and websites to promote their business

That’s why the Malaysian government created the SME Digitalisation Initiative to create a digital Malaysia. This grant was officially launched on 17 February 2020 by the Ministry of Finance (MOF). They manage this grant along with Malaysia Digital Economy Corporation (MDEC), SME Bank, and Bank Simpanan Nasional (BSN). 

The government offers a 50% matching grant going up to RM5,000 to SMEs that have the potential to digitise their companies. There are seven digitalisation services within this government grant for SMEs to choose from: 

  1. Human Resource Payroll System / Customer Relationship Management (CRM)
  2. Remote Working
  3. Digital Marketing / Sales 
  4. Enterprise Resource Planning (ERP) / Accounting and Taxation 
  5. Electronic Point of Sale System (e-POS) 
  6. Procurement 
  7. E-commerce 

In order to subscribe to any of the above services, the business should show how the service will help enhance its competitiveness and productivity over the period of five years.

This matching grant is limited to only one application per SME. However, the SME can apply to three digital services at most – so long as at least one service provider is endorsed by the MDEC. 

The SME Digitalisation Grant will only be available to the first 100,000 small and medium-sized businesses. Or, it may end 5 years from the starting date of 17 February 2020. This will depend on which of the two come first. By then, the grant will be worth RM500 million, none of which is required to be paid back by the selected companies. 

When you decide to go digital, it’s important to adopt cloud accounting software. This will allow you to manage your finances from anywhere and at any time. QuickBooks’ cloud accounting software works with a range of payroll, eCommerce, and point of sales apps like Salesforce and Shopify to improve your business. 

Are You Eligible For The SME Digitalisation Grant? 

If you are looking to apply for the SME Digitalisation Grant, it’s important to know the criteria for eligibility before starting the application process. Here are the encouraged attributes of potential applicants: 

  • Your SME or SME Cooperative should be at least 60% owned by Malaysians. 
  • Your company should be classified as an SME and registered under the relevant laws of Malaysia. 
  • Your SME/Coop must have been in operation for at least one year. 
  • For SMEs/Coops that have been in operation for one year, the company must have an annual minimum sales turnover of RM100,000. 
  • For SMEs/Coops that have been in operation for two years or more, the company must have an annual minimum sales turnover of RM50,000.
Grow Your Business With QuickBooks

How To Apply For The SME Digitalisation Grant Scheme 

The application process can be daunting. But with a proper explanation of the steps you need to follow, you’ll realise it’s easier than it seems. The application process is as follows: 

  1. The company must contact and appoint one or more Service Providers listed by MDEC to access any of the digitalisation services available. You may apply for a maximum of three digital services. 
  2. The SME should complete and submit the application form, as well as provide the required documents to their Service Provider. 
  3. The Service Provider will then submit the completed SME Digitalisation Initiative application form and its supporting documents to the Bank. 
  4. When the application is approved, the SME will be responsible to pay the difference of the total invoice amount after deducting the subsidised amount provided by the Initiative for each digitalisation service to the Service Provider. 
  5. The Bank should make a direct 50% payment of the total invoice amount, or RM5,000 at most to the Service Provider in a lump sum payment. Although, sometimes it may be done in stages depending on the Bank’s discretion. 

Check our article on the SME Digitalisation Grant, to see a more detailed overview of this government grant option. This includes the supporting documents you’ll need to apply for this grant and more. 

Other Malaysian Government Grants For SMEs 

Government grants help businesses adapt to the latest technology and invest in marketing and business expansion prospects. Here are some great funds and support systems provided by the Malaysian government for SMEs. 

Wage Subsidy Programme (WSP 3.0) 

The Wage Subsidy Programme was created to provide financial aid for salaries and wages to SMEs registered with Movement Control Order (MCO). The pandemic in 2020 made for very little to no income for many businesses. This forced employers to fire employees or cut their payouts. 

So, the Wage Subsidy Programme was created so that all businesses are liable for a subsidy of RM600 per employee. Businesses can only make a claim for employees who earn more than RM4,000 a month. The business is also only able to make claims for a maximum number of 500 employees.

PEMERKASA’s Additional Employment Incentives 

This Permerkasa Plus grant offers financial help to businesses in Malaysia, hiring people for gigs temporarily. Due to certain economic changes, millions of people lost their jobs and opted to work as freelancers or temporary workers. 

So, the government introduced this grant to increase employment opportunities for these individuals. These business owners and gig workers will receive benefits such as: 

  • 6-month employment at RM600 for 60,000 temporary workers. 
  • A subsidy of RM200 every month for 600 months for business owners. 
  • Over 300 free courses to help gig workers upskill themselves. 

Malaysian Government Supporting New Startup Launches

The Malaysian government offers some other grants that aim to promote the establishment of startups. Most startups don’t have enough funds to operate a high-end venture. Obstacles such as sales tax and other taxes can get in the way of your startup’s growth. 

These government grants were created to help startups grow and develop their businesses. You could claim a tax rebate if you launched your business between July 2020 and December 2021. This will allow you to save as much as RM20,000 each year for three consecutive years. 

Under some of these programs, unregistered businesses will be able to raise funds through crowdfunding. In addition to this, this grant offers free business registration to students who are willing to launch their own startups. 

Here is a list of a few additional business grants the Malaysian government provides: 

  • Sustainable Development Goals (SDGs), Financing Scheme 
  • PERMAI Special Prihatin Grant (GKP) 
  • Incentivising Women Entrepreneurs 
  • Safe@Work Initiative 
  • MARA Business Payment Rescheduling 
  • Electricity Bill Support

Do you feel better informed about Malaysia government grants? The Intuit QuickBooks Blog offers a variety of business-related topics. It’s all part of the support we offer to SMEs in Malaysia, including how to solve cash flow problems and strategies for social media marketing.

Explore our QuickBooks website for accounting software to help grow and expand your business in Malaysia today.