Digital transformation (DT) has revolutionized manufacturing by enhancing efficiency, productivity, and competitiveness. However, adoption remains concentrated among large corporations, while microenterprises (MEs) often lag due to limited resources, which hinders their growth. Conventional DT strategies focused on SMEs are ill-suited for MEs, which face distinct challenges such as informal structures, minimal capital, low digital literacy, and reliance on analog machinery—risking a widening digital divide. This study investigates DT in the context of manufacturing MEs, focusing on migrant-run enterprises in Oman operating under severe constraints. Based on a qualitative methodology—including interviews, field observations, and participatory work—it proposes a frugal, two-layer DT framework tailored to the socio-technical realities of MEs. The digital layer emphasizes immediate digitalization of business processes using accessible tools like spreadsheet dashboards and pricing templates, co-designed with ME stakeholders to ensure relevance and usability. The physical layer enables access to digitally capable production infrastructure through low-cost, DIY open-source machine tools (OSMT). This is demonstrated through the local replication of an open-source 3D printer design. By prioritizing affordability and leveraging open-source technologies, the proposed approach reduces dependency on proprietary systems and offers a practical path toward inclusive digital transformation. This research contributes to emerging discussions on DT for MEs, offering actionable strategies to enhance their competitiveness in an increasingly digital manufacturing landscape.