The Malaysia Grants Scheme (MGS) was administered by MDEC (now Malaysia Digital Economy Corporation) as a matching grant programme exclusively for MSC Malaysia Status companies. It provided co-funding of up to 50% of eligible project costs to support technology product development, R&D activities, quality certification, and market development initiatives.
Programme Overview
Matching Grant Structure
The MGS operated as a matching grant — for every ringgit a company invested in an eligible project, the government contributed a matching amount up to the approved grant ceiling. This co-investment model ensured companies had skin in the game while reducing the financial risk of technology R&D and product development.
Eligible Activities
Grant funding was available for software product development, systems integration R&D, process automation, quality and standards certification (ISO, CMM, etc.), technology licensing, and market development activities including international trade missions and exhibition participation.
Who Could Apply
Only companies holding valid MSC Malaysia Status were eligible to apply. Companies had to be incorporated in Malaysia, demonstrate the technical merit of the proposed project, and commit to maintaining MSC Status throughout the grant period. Bumiputera-owned and SME companies received priority in certain grant categories.
Grant Ceiling
Individual grant awards varied depending on the category and company size, typically ranging from RM 50,000 for smaller certification and market development grants to RM 500,000 or more for major R&D and product development projects. Cumulative grant awards per company were subject to overall programme limits.
Current Grant Programmes
The MGS has evolved into updated grant and incentive programmes under MDEC's Malaysia Digital (MD) framework. MSC Status companies and Malaysia Digital Status companies may now access funding through the GAIN (Go Ahead, Innovate Now) programme and other MDEC-administered initiatives. For current information on available grants, eligibility and application procedures, visit mdec.my or contact MDEC's one-stop centre directly.
Other MSC Malaysia Incentives
Pioneer Status
MSC Status companies may apply for Pioneer Status, granting full income tax exemption on statutory income for 5 years (extendable to 10 years for qualifying activities). One of the 10 Bill of Guarantees commitments — a core financial incentive for technology companies locating in the MSC corridor.
Investment Tax Allowance (ITA)
An alternative to Pioneer Status, ITA allows MSC Status companies to offset 60–100% of qualifying capital expenditure against taxable income for up to 5 years. Particularly beneficial for capital-intensive technology operations. Companies choose either Pioneer Status or ITA — not both.
R&D Tax Incentives
MSC Status companies conducting qualifying in-house R&D activities are eligible for enhanced tax deductions — double deduction on qualifying R&D expenditure. Companies may also claim tax deductions for contributions to approved R&D companies and institutions.