FUNDING OPPORTUNITIES & TAX INCENTIVES FOR MALAYSIAN INCORPORATED COMPANIES - PART 1

For entrepreneurs who are thinking of venturing/ or have just started a business in ICT, Bio-Technology & Life Sciences, Material Sciences and High Growth Technology industries or generation of ideas for an Innovative Knowledge-Based society and economy, this is good news for you as there is an opportunity for you to qualify for funding by Cradle Fund. 

Cradle Fund Sdn Bhd (Cradle Fund), is an agency under the Ministry of Finance, Malaysia (MOF) and is a not-for-profit organisation that manages the RM100 million Cradle Investment Programme (CIP) since its inception in 2003. An additional RM50 million was recently added to this allocation under the 10th Malaysian Plan for 2011 and 2012.

FUNDING OPPORTUNITY - CRADLE INVESTMENT PROGRAMME (CIP)

Cradle Fund's vision is to be the preferred and leading provider of early stage funding to innovative and aspiring entrepreneurs 

The Cradle Investment Programme (CIP) is Malaysia’s first development and technology commercialisation funding programme that enables budding innovators and aspiring entrepreneurs to transform their raw technology-based ideas into commercially-viable ventures, and helps local start-up companies to attain commercialisation. Cradle Fund has the highest rate of commercialization amongst grants in Malaysia so far.

Industries that qualify for CIP are as follows:-

ICT

• Mobile/wireless tech;
  
• Creative multimedia & content development;
  
• Shared services outsourcing; 
  
• Hardware design
  
• Software development (Bio-informatics, consumer productivity applications, data mining & business intelligence, electronic design automation, enterprise & business services, gaming & interactive entertainment, Internet & e-Commerce, networking, communications & connectivity, open source, operating systems, security)
  
• Internet-based businesses

Non-ICT

• Biotechnology (Bio-informatics, Bio-chemicals, Bio-diagnostics tools, agriculture and food tech)
  
• Advanced materials
  
• Advanced manufacturing-related tech
  
• Renewable energy / waste management / recycling tech
  
• High-technology consumer & business products
  

Others

• Semi-conductors (manufacturing of integrated circuits, microprocessors, logic devices, chipsets, memory chips)
  
• Life sciences (neuroscience, organic chemistry, potential drug target & method of treatment inventions, protein & nucleic acid-based inventions, small molecule chemistry & pharmaceuticals, medical devices, drug delivery systems, molecular biology assays, tools & techniques, analytical chemistry)
  
• Clean technology (energy consumption, power management, alternative fuels & materials)

Activities that are eligible for CIP Funding are as follows:-

Product Commercialization
(CIP-500)

Offers conditional grants of up to RM500,000 (maximum of 2 consecutive approvals per company) to local start-up companies with innovative, technology-based products or services to attain commercialisation.

CIP-500 recipients are given a 12-month period to complete the development of the relevant processes that will enable them to attain commercialisation.

Eligibility Criteria
Any start-up company which meets the following criteria:

1. At least 51% of the company’s equity is held by Malaysians, and
   
2. The company is in operations for less than 3 years, and
   
3. The company’s total revenue is not more than RM5 million in its total financial history, and
   
4. The company owns the Intellectual Property (IP) rights of the product or service which is intended for commercialisation, and
   
5. The company already has a prototype which only requires another 8% to 10% product refinement work to meet market and industry expectations or demands.

Allowable Funding

• Product refinement, market testing and customised packaging
  
• Marketing expenses (inclusive of collaterals, travel where necessary, etc)
  
• Intellectual Property (IP) search and registration
  
• Market research and feasibility studies
  
• Pay package of employees
  
• Rental and utilities
  
• Purchase of hardware and software
  
• Business plan refinement
  
• Technology licensing or acquisition (if necessary)
  
• Product related expenses (if necessary)
  
• Industry Focus
  

Benefits
As a CIP-500 recipient, researchers, innovators or students will be provided with more than just commercialisation funding. Recipients will also get value-added services that will help nurture, develop and prepare them to become successful businesses such as:

1. Networking opportunities
   
2. Further funding and market access support
   
3. Financial training
   

Prototype Development 
(CIP Catalyst)

Offers conditional grants of up to a maximum of RM150,000 (via two tranches of RM100,000 and RM50,000) to teams of innovative individuals with innovative, technology-based ideas in the ICT, non-ICT and high growth technology industries.

With the CIP Catalyst, recipients are given a 12-month period to complete the development of their prototypes or proofs-of-concept.

Eligibility Criteria
Any team of entrepreneurs which meets the following criteria:

1. Main applicant is a Malaysian aged 18 years and above, and
   
2. Main applicant is permanently residing in Malaysia, and
   
3. The team comprises a minimum of two (2) members and a maximum of five (5) members per application.
   

Allowable Funding

• Prototype development
  
• Proof-of-concept development
  
• Business plans development
  
• Purchase of market feasibility research
  
• Search and registration of Intellectual Property (IP)
  
• Surveys on concrete statistical data
  
• Product sampling expenses
  
• Industry Focus
  

Benefits
As a CIP Catalyst recipient, entrepreneurs will be provided with more than just prototype funding. Recipients will also get value-added services that will help nurture, develop and prepare them to become successful innovators and entrepreneurs, such as:

1. Monitoring of the idea development
   
2. Mentoring
   
3. Further funding and market access support
   
4. Networking opportunities
   
5. Product and idea refinement
   
6. Financial training

Prototype Development 
(U-CIP Catalyst)

Offers similar grants as CIP Catalyst. However, the U-CIP Catalyst is targeted at researchers/ inventors based in local research institutes, private and public universities, colleges and institutes of higher education, as well as the various commercialisation units within each of these organisations.

Similar to CIP Catalyst, recipients are given a 12-month period to complete the development of their prototypes or proofs-of-concept.

Eligibility Criteria
Any team of entrepreneurs which meets the following criteria:

1. Main applicant is a Malaysian aged 18 years and above, and
   
2. Main applicant is permanently residing in Malaysia, and
   
3. The team comprises a minimum of two (2) members and a maximum of five (5) members per application.
   

Allowable Funding

• Prototype development
  
• Proof-of-concept development
  
• Business plans development
  
• Purchase of market feasibility research
  
• Search and registration of Intellectual Property (IP)
  
• Surveys on concrete statistical data
  
• Product sampling expenses
  
• Industry Focus
  

Benefits
As a U-CIP Catalyst recipient, researchers, innovators or students will be provided with more than just prototype funding. Recipients will also get value-added services that will help nurture, develop and prepare them to become successful innovators and entrepreneurs, such as:

1. Monitoring of the idea development
   
2. Mentoring
   
3. Further funding and market access support
   
4. Networking opportunities
   
5. Product and idea refinement
   
6. Financial training

All CIP applications must be submitted online via www.cradle.com.my   

As there are few other incentives provided by Cradle Fund, we'll talk more about them in our next post.