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Realising that small and medium enterprises (SMEs) play a significant role in the economy, the Government has put in place various strategies and incentives to encourage SMEs to undertake high-value added activities such as innovation, design, and research & development (R&D).

A key strategy implemented in 2011 was the introduction of the Green Lane Policy (GLP) for SMEs. Under this policy, eligible innovative SMEs will be entitled to four main incentives, namely soft loans, tax benefits, priority in Government procurement, and Minister of Finance (Incorporated) (MOF Inc.) companies’ procurement programmes.


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These Government incentives are applicable to all eligible SMEs that are certified by the above agencies. You can click on the following organisation's logo to know more on the certification requirements

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As for EXIM Bank, SME are those with intention to do business abroad or already having business abroad or expanding their business abroad. Once certified, they will go through normal banking processes for loan application before being eligible for loan and tax incentives only.

Definition of SMEs


The definition of SMEs is based on two criteria:

  • The total sales turnover/revenue of a business in a year; OR
  • The number of full time employees of a business

Generally, SMEs in Malaysia are defined as follows:

  • Manufacturing sector: Sales turnover not exceeding RM50 million OR full-time employees not exceeding 200 workers
  • Services and other sectors: Sales turnover not exceeding RM20 million OR full-time employees not exceeding 75 workers

Definition by Size or Operation

  • Microenterprises across all sectors: Sales turnover of less than RM300,000 OR less than 5 full-time employees.
  • Table 1 summarises the definition for the small and medium categories for the respective sectors.

*The Guideline for New SME Definition issued by SME CORP. Malaysia is available for download below.