Small and Medium Enterprises (SME) in Malaysia

Introduction

• 6 key aspects about SMEs in Malaysia: definition, category, sector classification, criteria, additional conditions, benefits.

1. SME Definition

• Introduced by the National SME Development Council of Malaysia in June 2005.
• Two categories: manufacturing & services.
• SME criteria:
  • Manufacturing: Sales ≤ RM 50 million or full-time employees ≤ 200.
  • Services: Sales ≤ RM 20 million or full-time employees ≤ 75.

2. Definition of Enterprise Size

• Micro
  • Annual sales < RM 300,000 or full-time employees < 5.
• Small
  • Manufacturing: Sales RM 300,000 - RM 15 million or employees 5-75.
  • Services: Sales RM 300,000 - RM 3 million or employees 5-30.
• Medium
  • Manufacturing: Sales RM 15 million - RM 50 million or employees 75-200.
  • Services: Sales RM 3 million - RM 20 million or employees 30-75.

3. Sector Classification

• Manufacturing: Production of goods through physical or chemical processes.
• Services: Includes distributive, ICT, education, health, logistics.

4. Critical Eligibility Criteria

• Business must meet criteria for 2 consecutive years.
• Large businesses can become SMEs if criteria are met.

5. Additional Conditions

• Business must be registered with an authorised body like the Companies Commission of Malaysia.
• Does not include public-listed entities on the main board, MNCs, or affiliated companies.

6. Benefits of Being an SME

• Financial incentives: Subsidies, loans, capital.
• Non-financial incentives: Infrastructure, information, training from government or associations.
• Main agencies: SEDIA, MIDA.

Conclusion

• SMEs play an important role in Malaysia's economic growth.
• They have a significant impact on job opportunities and income.