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New Definition of Small and Medium Enterprises (SMEs) for Malaysia

Effective Date: 1 January 2014

 

 

Prime Minister, YAB Dato’ Sri Mohd Najib Tun Haji Abdul Razak had recently announced a new definition for SMEs for Malaysia effective 1 January 2014.  The National SME Development Council (NSDC) which is chaired by the Prime Minister with members from key Ministries and Agencies, including Sabah and Sarawak, had approved the proposal to raise the qualifying threshold for sales turnover and employment of SMEs for all economic sectors during the 14th NSDC Meeting held on 11 July 2013 in Putrajaya.

 

The new definition is expected to result in more firms being classified as SMEs, particularly from the services sector. This will facilitate the country’s transformation to a high income nation through the initiatives under the SME Masterplan. As a result of the change in definition, the share of SMEs to total establishments is expected to increase from 97.3% currently, to 98.5%.

 

(A) MANUFACTURING

 

MICRO

• Sales turnover of less than RM300,000 OR

• employees of less than 5

 

SMALL

• Sales turnover from RM300,000 to less than RM15 mil OR

• employees from 5 to less than 75

 

MEDIUM

• Sales turnover from RM15 mil to not exceeding RM50 mil OR

• employees from 75 to not exceeding 200

 

(B) SERVICES AND OTHER SECTORS

 

MICRO

• Sales turnover of less than RM300,000 OR

• employees of less than 5

 

SMALL

• Sales turnover from RM300,000 to less than  RM3 mil OR

• employees from 5 to less than 30

 

MEDIUM

• Sales turnover from RM3 mil to not exceeding RM20 mil OR

• employees from 30 to not exceeding 75

   

   

  Note:

  If a business fulfills either one criteria across the different sizes of operation, then the smaller size will be applicable. For example, if a firm’s sales turnover falls under microenterprise but employment falls under small, the business will be deemed as a microenterprise.