Get To Know About SME Company in Malaysia

  • Post category:Malaysia

Whether you are starting a new business or looking to expand an existing one, this guide will help you navigate the challenges and opportunities regarding the SME Company in Malaysia.

SME company in Malaysia

For today’s guide, we’ll go over all you need to know about SME company in Malaysia and their different definitions according to each government body. Every country has the right to define its own definition, but there is a common goal: to distinguish small medium enterprise Malaysia firms from giant corporations. All the information that you will need to know when it comes to SMEs Malaysia can be seen below.


  • In the manufacturing sector, SMEs are companies with annual sales of up to RM50 million OR no more than 200 full-time employees.

Small to medium-sized enterprises (SMEs) are companies with annual sales of up to RM20 million or up to 75 full-time employees in the services and other sectors.

  • The definition of an SME is critical for access to funding and government assistance programs aimed exclusively at SME businesses in Malaysia. 

What are the sectors in Malaysia that consist the most of SMEs?

According to SMECorp, these are the sectors that have the highest number of SMEs as of 2020.

Services sector 85.5% (984,643 companies)
Construction sector 7.4% (85,637 companies)
Manufacturing sector 5.1% (58,439 companies)
Agricultural sector 1.7% (19,130 companies)
Mining and Quarrying sector 0.3% (3,490 companies)

What are the main factors that determine if an enterprise is an SME?

There are three main factors to determine if a particular enterprise is considered an SME, which are: –

  • Staff headcount
  • Annual sales turnover
  • Paid-up capital

What is SME in Malaysia, according to Bank Negara?

Bank Negara Malaysia (BNM) amended the definition of SMEs in Malaysia in a notification released on December 27, 2017, the specifics of which are as follows:

  • Manufacturing A sales turnover of not more than RM50 million OR a full-time workforce of no more than 200 workers, and
  • Services and other industries A sales turnover of less than RM20 million OR a full-time staff of no more than 75 employees.
Sectors Micro Small Medium
Manufacturing Annual sales turnover of less than RM300,000 OR less than 5 full-time workers Annual sales turnover ranges from RM300,000 to less than RM15 million, or the number of full-time workers ranges from 5 to 75 Annual sales turnover ranges from RM15 million to less than RM50 million, or the number of full-time workers ranges from 75 to 200
Services and Other industries Similar  to the  manufacturing sector Annual sales turnover ranges from RM300,000 to less than RM3 million, or the number of full-time workers ranges from 5 to 30 Annual sales turnover ranges from RM3 million to less than RM20 million, or the number of full-time workers ranges from 30 to 75.

What is SME in Malaysia according to “Lembaga Hasil Dalam Negeri” (LHDN)?

The following definitions of SMEs are underlined by Malaysia’s “Lembaga Hasil Dalam Negeri” (LHDN):

  • An SME is defined as a Malaysian business with a paid-up capital of RM2.5 million or less that is not affiliated with any company having a paid-up capital greater than RM2.5 million. 
  • A sales turnover of no more than RM5 million every year.

An example of an SME company in Malaysia is Bericap Malaysia Sdn Bhd.

If you are interested in knowing more about the process of incorporating a new company here, refer to our page Company Incorporation in Malaysia.

What is SME in Malaysia, according to the Ministry of Human Resources (MOHR)?

The Malaysian Ministry of Human Resources (MOHR) categorizes SMEs based on the number of people they employ. The categories are listed below in brief.

Sectors Micro Small Medium
Employee number(Include foreign workers and expatriates) Less than 75 76 - 200 Above 200


SMEs are starting to embrace new business tactics to expand their market base as a result of the ongoing expansion of digital culture. Increasing online marketing for direct client contact is one of the tactics. Digital marketing offers a variety of advantages, including boosting efficiency and productivity.

Nowadays, before choosing a business to work with or a website from which to buy services, customers frequently browse social media platforms and other websites. Small and medium-sized businesses must create a strong online presence to realize their full potential.


Social Media Marketing

Social media is an essential tool for marketing because potential customers spend a lot of time on these platforms. Sharing interesting and relevant information, using advertising to attract new clients, establishing brand recognition, and analyzing data to better understand client wants and behaviour are just a few ways small companies in Malaysia can stimulate growth and draw in audiences.

Incorporating expert copyrighting into the area of social media marketing is crucial. Customer loyalty can be significantly increased by providing engaging content, interacting with users through comments, and responding to inquiries and complaints.

Voice Strategy

When conducting online searches, many users use voice assistants. In order to stay relevant, SMEs have begun adjusting to this new trend by developing a voice search strategy. They can enhance their content with particular relevant keywords that frequently turn up in voice searches. Voice searches mimic questions more often than not, so the information should be tailored to give clear responses.

Novel Content

Businesses today frequently utilize interactive content marketing to engage their audiences. Online voting, animated infographics, polls, and ratings are examples of this type of content. The benefit of digital marketing is that a small company in Malaysia may increase its market share globally and track the impact of its campaigns in real time. So that they can quickly receive customer input to help them improve their goods and services.

Role of SMEs in our Economy

SMEs make up the great majority of enterprises in most nations.

This proves accurate for Malaysia, where they are frequently referred to as the foundation of the economy.

Despite their s and M sizes, these businesses contribute significantly overall. Besides contributing significantly to economic growth, SMEs are a major employer today, supporting 5.7 million jobs for 70% of the labour force. That is 66% of all employment in Malaysia. 89.2% of SMEs in Malaysia are engaged in the service sector.

To summarise, SMEs in Malaysia provide several economic prospects, and their contribution to Malaysia’s GDP cannot be underestimated. As Malaysia’s economy grows, SMEs play an important role in stimulating growth, employment, and income.

Relin Consultants assists SMEs in establishing a company in Malaysia. Engage our comprehensive variety of services to jumpstart your SME company initiative, by contacting us at +65 8756 2027 or by visiting our website.


What are the advantages of registering as a SME?

Companies that have gained the status can be considered for participation in programs, as well as to receive help and incentives designed specifically for SMEs.

Can I check my SME status online?

Yes, you can check your SME status online via the SME Status Registration website.

What is the SME Status Registration System?

The SME Status Registration System is a new program launched by SME Corp. Malaysia to verify that any SME that aspires to participate in Government programs or obtain assistance/incentives meets the Government’s criteria.

Is the SME Status Certificate a mandatory regulation for SMEs operating their businesses in Malaysia?

No, the certificate is not a mandatory regulation for operating businesses in Malaysia.

How much do SMEs contribute to the total employment in Malaysia?

About 66.2% of all employment in Malaysia is contributed by SMEs.

How does the ministry of human resources define SMEs in Malaysia?

SMEs are classified by the number of employees they employ, including expatriates and foreign workers, according to the ministry of human resources.

What is the definition of SMEs in Malaysia according to the LHDN tax authority?

The key definitions of SMEs by LHDN are highlighted in the list below:

  1. A Malaysian-based business with a paid-up capital of no more than RM 2.5 million.
  2. Is not connected to any business with paid-up capital exceeding RM 2.5 million.
  3. A maximum annual sales turnover of RM 5 million.

What are the three main factors to consider if an enterprise is an SME?

If an enterprise is an SME or not, depends on three key factors:

  1. Staff headcount
  2. Annual Sales turnover
  3. Paid-up capital

Are there any incentives available for SMEs in Malaysia?

Yes, the government of Malaysia provides various incentives and support programs to promote the growth and development of SMEs. These incentives include tax incentives, grants, loans, and other forms of financial assistance. SMEs may also be eligible for assistance under various industry-specific programs and initiatives.

What types of support are available for SMEs in Malaysia?

The government and various agencies provide a range of support programs and initiatives to help SMEs in Malaysia, including funding and financing programs, training and development programs, market access and export assistance, and advisory services.