Welcome, Sign-In

Login to Your Account

Enter you user id and password to sign in

FAQs – Fund Management

Frequently Asked Questions (FAQs)

– Technology Acquisition Fund (TAF)

What is TAF?

TAF was established to facilitate eligible Malaysian companies in the acquisition of proven foreign technologies for immediate incorporation into said companies’ manufacturing activities. The partial grant under TAF enables companies to avoid expensive and often risky technology development stages.

Before applying for TAF, it is mandatory for the company to have a draft agreement outlaying clearly the clauses to be agreed upon between the Technology Provider and the company (Technology Recipient).

For more information on TAF, click here.

Who is eligible to apply for TAF?

TAF is provided for the acquisition of proven foreign technology by an SME.

An SME is defined as below:

  1. Manufacturing sector – a company with annual turnover not exceeding RM 50.0 million OR having employees not exceeding 200.
  2. Services sector and other sectors – a company with annual turnover not exceeding RM 20.0 million OR having employees not exceeding 75.

For further details on eligibility, click here.

What is the quantum of funding provided under TAF?

TAF provides funding in the form of partial grants with a maximum of RM 4 million:

  1. For licensing of technology: RM 2.8 million or 70% of the eligible expenses (whichever is lower). The remaining 30% of funding must be sourced by the applicant.
  2. For purchase of equipment: RM 1.2 million or 50% of the eligible expenses (whichever is lower). The remaining 50% of funding must be sourced by the applicant.

What is the duration of the funding under TAF?

The duration of the funding is four (4) years:

  1. two (2) years for implementation and monitoring; and
  2. two (2) years for the payback scheme.

What is the a payback scheme?

The payback scheme is part of the new policy instituted by the government under RMKe-11.

How will the payback scheme be conducted?

The fund recipient company must repay 50% of the total approved amount.
The zero interest payment will begin in the third year on instalment basis for a period of not more than 24 months.
The payment may be made in cash or in kind (in the form of CSR activities, provision of training etc. to be agreed upon with MTDC).

How will the fund recipient company be assessed during the duration of the fund?

MTDC will monitor the fund recipient company’s project closely to ensure successful acquisition in accordance with the business plan submitted by the company.
However, if the project fails, MTDC has the right to revoke and retrieve the amount disbursed to the company through legal means.

– Commercialisation of Research & Development Fund (CRDF)

What is CRDF?

CRDF was established to fund the commercialisation of locally developed technologies by Malaysian-owned companies. The technologies can be those developed by the public sector or they can also be the output of in-house research and development (R&D) activities by the companies.

In order to apply for CRDF, companies must ensure that R&D has been completed successfully and that a commercial-ready prototype is available. CRDF does not cover R&D activities.

How many types of CRDF are there?

There are three (3) types of CRDF:

  1. CRDF 1
  2. CRDF 2
  3. CRDF 3

– CRDF 1

Who is eligible to apply for CRDF 1?

CRDF 1 is a grant to enable spin-off and start-up companies to prove their technology’s readiness and to gauge market acceptance before receiving additional funding.

A spin-off company, otherwise known as a Syarikat Terbitan Universiti (STU):

  1. is defined as a company with local Public or Private University/Government Research Institution ownership.
  2. is required to operate their business from any recognised Technology Centre locally.

A start-up company:

  1. is a newly set up Small & Medium Enterprise (SME) established specifically as the vehicle for the commercialisation activities of a specific project.
  2. is recommended to operate their business from any recognised Technology Centre.

For further details on eligibility, click here.

What is the quantum of funding provided under CRDF 1?

CRDF 1 provides funding in the form of a partial grant with a maximum of RM 500,000 or 70% of the eligible expenses (whichever is lower). The remaining 30% of funding must be sourced by the applicant.

What are the eligible expenses under CRDF 1?

The eligible expenses under CRDF 1 are as follows:

  1. Technology consultation fees
  2. Administration and overheads
  3. Product registration
  4. Cost of outsourcing production
  5. Advertising, marketing, and promotion
  6. Value added services
  7. Legal and secretarial costs

For further details on eligible expenses, click here.

What is the duration of the funding under CRDF 1?

The duration of the funding is not more than 12 months.

How will the fund recipient company be assessed during the duration of the fund?

There are two (2) milestones under CRDF 1:

  1. Evidence of technology readiness – that the technology is commercial-ready
  2. Evidence of market acceptance – that the technology is well-received by consumers as indicated by enquiries, orders, and sales

MTDC will monitor the fund recipient company’s project closely to ensure the achievement of the commercialisation milestones.

– CRDF 2

Who is eligible to apply for CRDF 2?

CRDF 2 is a grant for the commercialisation of any local R&D by an SME.

An SME is defined as below:

  1. Manufacturing Sector – a company with annual turnover not exceeding RM 50.0 million OR having employees not exceeding 200.
  2. Services sector and other sectors – a company with annual turnover not exceeding RM 20.0 million OR having employees not exceeding 75.

For further details on eligibility, click here.

What is the quantum of funding provided under CRDF 2?

CRDF 2 provides funding in the form of a partial grant with a maximum of RM 4.0 million or 70% of the eligible expenses (whichever is lower). The remaining 30% of funding must be sourced by the applicant.

What are the eligible expenses under CRDF 2?

The eligible expenses under CRDF 2 are as follows:

  1. Equipment
  2. Technology acquisition
  3. Administration and overheads
  4. Production
  5. Advertising, marketing, and promotion
  6. Intellectual property and standards compliance
  7. Value added services

For further details on eligible expenses, click here.

What is the duration of the funding under CRDF 2?

The duration of the funding is four (4) years:

  1. two (2) years for implementation and monitoring; and
  2. two (2) years for a payback scheme.

What is the a payback scheme?

The payback scheme is part of the new policy instituted by the government under RMKe-11.

How will the payback scheme be conducted?

The fund recipient company must repay 12.5% of the total approved amount.

The zero interest payment will begin in the third year on instalment basis for a period of not more than 24 months.

The payment may be made in cash or in kind (in the form of CSR activities, provision of training etc. to be agreed upon with MTDC).

How will the fund recipient company be assessed during the duration of the fund?

MTDC will monitor the fund recipient company’s project closely to ensure successful commercialisation in accordance with the commercialisation plan submitted by the company.

However, if the project fails, MTDC has the right to revoke and retrieve the amount disbursed to the company through legal means.

– CRDF 3

Who is eligible to apply for CRDF 3?

CRDF 3 is a grant for the commercialisation of any local R&D by a non-SME or a large company.

An SME is defined as below:

  1. Manufacturing Sector – a company with annual turnover not exceeding RM 50.0 million OR having employees not exceeding 200.
  2. Services sector and other sectors – a company with annual turnover not exceeding RM 20.0 million OR having employees not exceeding 75.

A large company is a company with more than RM 25.0 million annual turnover and engaging more than 150 employees.

For further details on eligibility, click here.

What are the eligible expenses under CRDF 3?

The eligible expenses under CRDF 3 are as follows:

  1. Equipment
  2. Technology acquisition
  3. Advertising, marketing, and promotion
  4. Intellectual property and standards compliance
  5. Value added services

For further details on eligible expenses, click here.

What is the duration of the funding under CRDF 3?

The duration of the funding is four (4) years:

  1. two (2) years for implementation and monitoring; and
  2. two (2) years for the payback scheme.

What is the a payback scheme?

The payback scheme is part of the new policy instituted by the government under RMKe-11.

How will the payback scheme be conducted?

The fund recipient company must repay 50% of the total approved amount.

The zero interest payment will begin in the third year on instalment basis for a period of not more than 24 months.

The payment may be made in cash or in kind (in the form of CSR activities, provision of training etc. to be agreed upon with MTDC).

How will the fund recipient company be assessed during the duration of the fund?

MTDC will monitor the fund recipient company’s project closely to ensure successful commercialisation in accordance with the commercialisation plan submitted by the company.

However, if the project fails, MTDC has the right to revoke and retrieve the amount disbursed to the company through legal means.

– Business Growth Fund (BGF)

What is BGF?

BGF is a fund designed to bridge the financing gap between the early stage of commercialisation and venture capital financing for high technology companies.

BGF also functions to assist high-growth technology-based companies to scale up and expand their business, preferably in the international market.

Who is eligible to apply for BGF ?

BGF is targeted at technology companies with high growth potential.

The company must have:

  1. a minimum of 75% Malaysian ownership;
  2. institutional shareholding(s) of not more than 25%;
  3. achieved a minimum revenue of RM 1.5 million; and
  4. has shown profits in the recent financial year

What is the quantum of funding provided under BGF?

BGF provides funding of up to RM10.0 million.

What type of instrument is used under BGF?

BGF offers equity funding in the form of Redeemable Convertible Preferences Shares (RCPS).

What are the eligible expenses under BGF?

BGF covers all costs related to capital and operating expenses except for the purchase of land and building.

What is the financing duration of BGF?

The duration of BGF is five (5) years.

How will the fund recipient company be assessed during the duration of BGF?

MTDC will monitor all projects closely so that the projects are successfully executed in accordance with the agreed milestones as stipulated in the agreement under BGF.

How is the funding provided from MTDC to the fund recipient company?

The approved funding amount will be disbursed directly into a special account but the utilisation of the fund is determined based on tranches related to the milestones.

What is the first step to make an application?

The applicant needs to submit a short write-up via email to BGF on each of the following matters related to the company’s business:

  1. Novelty of the technology
  2. Viability of the business model
  3. Profitability of the business
  4. Sustainability of the business

The write-up on each of the above should be written in a summarised format (preferably not more than three (3) pages long).

BGF will then review the write-up and follow-up with the company to assist on completing the application.

– Business Start-Up Fund (BSF)

What is BSF?

BSF is a type of financing assistance targeted at technology-based start-up companies with strong potential for commercialisation.

The fund is meant to support and encourage entrepreneurship, particularly in the creation of new technology-based businesses within the growth sectors of the economy.

Who is eligible to apply for BSF ?

BSF is for technology-based start-up businesses with novel or innovative products.

A start-up company is a new Small & Medium Enterprise (SME) established specifically as the vehicle for the commercialisation activities of a specific project.

For further details on eligibility, click here.

What is the quantum of funding provided under BSF?

BSF provides funding of up to RM5.0 million or 90% of the total project cost, whichever is lower. The applicant is only required to source the remaining 10% of the fund to indicate the company’s commitment.

What is the type of financial instrument used for the BSF?

BSF offers flexible funding via an instrument called Convertible Promissory Notes (CPN).  The CPN charges 3.5% interest with an option to be converted to Redeemable Convertible Cumulative Preferences Shares (RCCPS).

Should there be no conversion, the applicant will begin repayment only after the third year of financing i.e. the first month of the fourth year, on a monthly basis over a five-year period. The repayment includes 3.5% interest per annum.

What is the duration of the funding under BSF?

The duration of the funding is eight (8) years:

  1. three (3) years payment-free period; and
  2. five (5) years repayment period.

What are the eligible expenses under BSF?

BSF covers all costs related to capital and operating expenses except for the purchase of land and building.

How will the fund recipient company be assessed during the duration of the fund?

MTDC will monitor all projects closely so that the projects are successfully executed according to the agreed milestones and projections.

However if the project fails, MTDC has the right to revoke and retrieve the amount disbursed to the company.

What are the milestones that need to be achieved?

The milestones will be determined based on the company’s proposal and upon acceptance by the Technical and Approval Committee during the evaluation phase and (when necessary) during the monitoring period.

How is the funding disbursed from MTDC to the fund recipient company?

Disbursements will be made in stages based on the achievement of the agreed milestones (covered in a Milestone Schedule in the CPN). The first disbursement is made once the company has submitted a drawdown notice.  Note that a signed and stamped CPN must be completed before the disbursement can be approved.

Subsequent disbursements are made upon the completion of each of the following milestones. The recommended amount to be disbursed shall be determined based on the business progress and financial performance of the project.

Can the applicant request for an upfront disbursement?

Except for the initial disbursement, subsequent disbursements are made based on the achievement of the agreed milestones.

What documents are required to submit an application for BSF?

The following documents are required to submit an application for BSF:

  1. Application form (insert link)
  2. BSF Business Plan (insert link)
  3. Application checklist (insert link) with all the relevant documents duly verified and certified true copy by the company secretary
  4. A softcopy (in CD or USB flash drive) of the applicant’s Business Plan and financial projection

Prior to submission, please ensure that the application form and checklist are properly filled and that the business plan is prepared in accordance with the format provided.

Incomplete submission will either cause a delay in processing or rejected. For more information on how to apply, please click here.

– Business Expansion Fund (BEF)

What is BEF?

BEF is a funding scheme to help Bumiputera technology-based companies conduct business expansion for local and international activities.  The funding is a combination of equity financing and bank loans.

Who is eligible to apply for BEF?

To apply for BEF, the company must be at the expansion stage. This is indicated by:

  1. robust sales and profitability within the last five (5) years;
  2. strong expansion potential in the next five (5) years via local or international operations;
  3. recorded profitability three (3) times during the past five (5) years in operation; and
  4. minimum annual turnover of RM 5.0 million and above during the past five (5) years in operation.

For further details on eligibility, click here.

Are there any additional criteria for international expansion?

To be eligible for international expansion, the business operation must also fall under one or more of the following activities:

  1. Exporting to international market;
  2. Licensing for international market;
  3. Engagement with foreign partner as agent or distributor;
  4. Set up manufacturing/distribution facilities abroad provided significant sales generated from the region prior to facilities setup;
  5. Set up sales office abroad; and/or
  6. Expansion through joint venture (JV), however the eligible companies must have 70% equity in the JV Company.

What is the quantum of funding provided under BEF?

The quantum of funding under BEF is as follows:

  1. For local expansion – RM 10.0 million
  2. For international expansion – RM 15.0 million

What if a company requires more funding than the quantum provided?

If a company requires more funding, MTDC will assist and facilitate in securing more funds through the Advisory and Value Added Services (AVAS) Division.

However, an applicant may also apply to their preferred bank(s) and provide the proof of application to support their BEF application.

What is the funding instrument utilised under BEF?

BEF offers equity funding in the form of redeemable convertible preferences shares (RCPS). The characteristics of RCPS are as follows:

  1. no ownership – the investor does not take ownership in the company;
  2. convertible – they can be exchanged for common shares at a defined ratio; and
  3. redeemable – the issuing company or BEF recipient has the option to repay after five (5) years.

Therefore, RCPS allows the company to either convert or redeem the RCPS shares owned by MTDC.

What are the eligible expenses under BEF?

BEF fund is eligible for all activities except:

  • Purchase of land.
  • Purchase of building.
  • Wages / Salaries
  • Complimentary funding – may be considered subject to eligibility criteria.

However, the loan portion from the banks may be used for purchase of land and buildings.

What is the duration of the funding under BEF?

The duration of the funding is five (5) years.

How will the fund-recipient company be assessed during the duration of the fund?

MTDC will monitor all projects closely so that the projects are successfully executed according to the agreed milestone and plan.

However if the project fails, MTDC has the right to revoke and retrieve the amount disbursed to the company through legal means.

For international expansion, the proposed project must show potential revenue contribution from international operations of about 25% or RM 1.25 Million, whichever is lower, within three (3) years from the date of the BEF approval.

How is the funding disbursed from MTDC to the fund recipient company?

Disbursement will be made in stages based on the milestone achieved.

The first disbursement will be made upon the signing of the agreement and the company’s submission of a drawdown notice.

Subsequent payments will be made upon the completion of each milestone within 24 months or earlier. MTDC will verify the recommended amount to be disbursed according to the physical progress and financial performance of the project.

What are the milestones that need to be achieved?

The milestones will be decided by the company in accordance with their business plan and after discussions with the assigned processing officer.

Can a company request for funding to be disbursed upfront?

No, MTDC does not practice upfront disbursements. Disbursements are made based on milestones achieved.

What documents are required to submit an application for BEF?

The following documents are required to submit an application for BEF:

  1. Application form
  2. BEF Business Plan
  3. Soft copy (in CD or USB flash drive) of the BEF Business Plan
  4. Application checklist (insert link) with all the relevant documents duly verified
  5. Soft copy (in CD or USB flash drive) of the relevant documents according to the application checklist

Prior to submission, please ensure that the application form and checklist are all properly filled and that the BEF business plan is prepared in accordance with the format provided.

Incomplete submissions will either cause a delay in processing or be rejected by the processing officer. For more information on how to apply, please click here.

Offical Website / Laman Rasmi Malaysian Technology Development Corporation © 2017