Maximize Your Digital Transformation: MIDA Automation Capital Allowance & SIRIM Smart Tech Up Grant Explained

Unlock Double Benefits for Your Smart Factory Journey

Malaysian manufacturers now have two powerful incentives to accelerate Industry 4.0 adoption:

1. MIDA Automation Capital Allowance (ACA)

200% tax deduction on first RM10M spend
Valid for assessments from 2023-2027
Covers retrofits with Industry 4.0 elements

2. SIRIM Smart Tech Up Grant

Financial support for technology adoption
Covers up to 25% of project costs; capped at RM500k
Supports IoT, AI, automation solutions

Hexa IoT’s solutions qualify for both programs, delivering immediate ROI.

Objectives of Automation Capital Allowance (ACA) & Smart Tech Up Grant

Both Malaysia’s Automation CA and Smart Tech Up Grant aim to drive digital transformation and industrial competitiveness, but with complementary approaches:

Shared Goals

1. Boost Productivity & Efficiency

Encourage adoption of automation, IoT, AI, robotics, and Industry 4.0 technologies.
Reduce reliance on manual labour and optimize operations.

2. Enhance Global Competitiveness

Help Malaysian businesses (especially SMEs) modernize and compete in high-value markets.

3. Accelerate Digital Transformation

Promote smart manufacturing and services through advanced tech integration.

Distinct but Complementary Approaches

Aspect	Smart Tech Up Grant	Automation CA
Type of Support	Grant funding (direct financial aid)	Tax incentive (200% allowance on qualifying expenses)
Target Beneficiaries	SMEs (focused on tech adoption)	Manufacturing & services firms (including large corporations)
Scope	Broader smart tech adoption (e.g., AI, IoT, automation)	Focus on automation + Industry 4.0 machinery/software
Max. Support	RM500k (including assessment, proposal, training & post project assessment):25% Government assistance	RM10 million (tax allowance cap)
Verification Body	SIRIM (technical evaluation)	Joint assessment by MIDA (non-tech) + SIRIM (tech)

Combined Impact

Financial Flexibility: Businesses can use grants (Smart Tech Up) for initial funding and tax relief (ACA) for long-term ROI.
Wider Reach: Covers both SMEs (via grants) and larger firms (via tax incentives).
Tech-Driven Growth: Aligns with Malaysia’s Industry 4.0 Policy and National Fourth Industrial Revolution (4IR) Strategy.

Conclusion

Together, these initiatives create a two-tier support system:

Smart Tech Up Grant: Lowers entry barriers for SMEs adopting smart tech.
Automation CA: Rewards scaling automation with tax savings.

Outcome: Faster tech adoption, higher productivity, and stronger global competitiveness for Malaysian industries.

How To Apply

1. Smart Tech Up Grant

Eligibility & Requirements

✅ Open to: Malaysian SMEs in manufacturing and services.

✅ Must have:

Valid business registration.
Proof of financial capability (for co-funding, if required).
A clear project proposal showing how the tech improves efficiency.

Application Process

1. Submit Online Application

Visit Smart Tech Up Grant Portal.
Log in or register a new account.

Fill in company details, project scope, and expected outcomes.

2. Technical Evaluation by SIRIM

SIRIM reviews the proposal for feasibility and impact.
May include site visits or additional documentation.

3. Approval & Disbursement

Successful applicants receive grant funding.
Must comply with post-approval reporting (e.g., progress updates).

Deadline: Rolling intake (check website for updates).

2. Automation Capital Allowance (ACA)

Objective: Provides 200% tax deduction on automation and Industry 4.0 investments (up to RM10 million).

Eligibility & Requirements

✅ Open to: Manufacturing & services firms (including large companies).

✅ Must have:

Valid Manufacturing License (ML) or services sector permit.
At least 36 months of operational history.
Proof of new automation/Industry 4.0 tech (not basic software).
SIRIM verification confirming productivity gains.

Application Process

1. Submit Online via MIDA

Apply at MIDA’s Investment Malaysia Portal by logging in or registering new account.

2. MIDA & SIRIM Evaluation

MIDA checks non-technical compliance.
SIRIM conducts technical verification (site visits, audits).

3. Approval & Tax Claim

MIDA issues a Consideration Letter.
Submit claim to LHDN (Inland Revenue Board) when filing taxes.

Deadline: Applications accepted until 31 December 2027.

Why Hexa IoT Solutions Are Perfect for Both Programs

1. Enhanced Operational Control & Streamlining with Pandora Software

Hexa IoT Solution: Pandora Software is a robust IoT platform that provides real-time monitoring and control of industrial operations. It enables seamless digitization of workflows, predictive maintenance, and data-driven decision-making.
Smart Tech Up Grant Synergy: The grant can fund the implementation of Pandora Software, covering costs such as hardware integration, software licensing, and staff training. Businesses gain real-time oversight, reduced downtime, and optimized resource allocation, leading to significant efficiency improvements.
Automation CA Synergy: Retrofit costs for integrating Pandora Software into existing systems qualify for the 200% tax deduction, accelerating ROI while modernizing operations.

2. Precision Monitoring & Quality Assurance with Environmental Solutions

Hexa IoT Solutions:
- Pandora Revma: Provides smart metering for power usage analytics and vibration/noise monitoring for predictive maintenance.
- Pandora Varos: Retrofits conveyor systems with smart scales for automated weighing and traceability.
- Pandora Rival & Pandora Thermikos: Tracks temperature, humidity, and pressure in manufacturing environments.
Smart Tech Up Grant Synergy: The grant supports adoption of these monitoring tools, enabling businesses to maintain quality consistency, reduce waste, comply with standards, and prevent equipment failures.
Automation CA Synergy: These solutions qualify for the 200% tax deduction by:
- Reducing man-hours through automation (Varos)
- Enhancing energy efficiency (Revma)
- Integrating Industry 4.0 elements (all solutions)

3. Automated Counting & Packaging Efficiency with Komis

Hexa IoT Solution: Komis: Smart Counter – Retrofitting automates product counting in labeling and packaging lines. Integrated with flow sensors and real-time dashboards, it eliminates manual counting errors, reduces manpower dependency, and boosts production line productivity.
Smart Tech Up Grant Synergy: The grant can fund retrofitting Komis into existing production lines, covering hardware installation and software integration. Businesses benefit from faster packaging processes, reduced labor costs, and accurate inventory tracking.
Automation CA Synergy: As a retrofit automation tool, Komis qualifies for the 200% tax deduction, making it a cost-effective upgrade for packaging lines.

4. Advanced Quality Control & Anomaly Detection with LuxioAI

Hexa IoT Solution: LuxioAI is an AI-powered visual inspection system that detects defects in real-time, ensuring high product quality.
Smart Tech Up Grant Synergy: The grant can subsidize the deployment of LuxioAI, covering AI model training and integration with existing production lines. Businesses benefit from automated defect detection, reduced manual inspection costs, and improved product reliability.
Automation CA Synergy: AI-driven systems like LuxioAI qualify for the tax allowance by enhancing productivity through automation, providing dual financial and operational benefits.

5. Optimized Customer Interaction & Data Insights with AI Chatbot

Hexa IoT Solution: Hexa IoT’s AI Chatbot enhances customer service by providing instant responses, collecting feedback, and generating actionable insights.
Smart Tech Up Grant Synergy: The grant extends to business efficiency tools like AI chatbots, helping companies improve customer satisfaction, streamline support operations, and make data-driven decisions.
Automation CA Synergy: While primarily covered under the grant, AI chatbots integrated with IoT systems may also qualify for partial tax benefits under broader digital transformation initiatives.

Get Started

Explore Hexa IoT’s Solutions: https://www.hexaiot.com.my/solution/
Explore Hexa IoT’s Used Cases: https://www.hexaiot.com.my/solution-used-case/
Apply for the Smart Tech Up Grant: https://smarttechup.sirim.my/
Apply for Automation CA via MIDA: https://investmalaysia.mida.gov.my/
Contact Hexa IoT: https://hexaiot.com.my/contact or Whatsapp

Ready to transform your operations? Leverage these incentives today to build a smarter, more competitive factory!