KUALA LUMPUR: Small and medium enterprises (SMEs) in Malaysia are on track to contribute 41% to the country's gross domestic product by 2020 compared to 32% in 2012, said Minister of International Trade and Industry (MITI) Datuk Seri Mustapa Mohamed.
"Local SMEs are now suppliers for multi-national companies (MNCs) in the global chain. With the exposure and skills obtained, many entrepreneurs have raised their companies' ability to penetrate the export market," he said after opening the inaugural Forum Keusahawanan Malaysia (Fokem) 2014.
The forum provides a platform for successful Malaysian entrepreneurs to share their success with new entrepreneurs.
In his speech, Mustapa said in 2012, SMEs' total workforce grew 6.4% compared to 6% for MNCs, and their share of the nation's workforce rose to 57.4% in 2012 from 57.1% in 2010.
To enhance SMEs' competitiveness, the government encourages them to merge to become stronger entities, he said.
"Towards this purpose, MITI and SME Corp Malaysia launched a merger and acquisition incentive for small and medium services providers in nine services sub-sectors last week," he said.
Successful applicants will enjoy a flat rate of 20% on all taxable income earned by the merged companies for a period of five years, and will also be exempted from stamp duty on the merger document, he said.
He added some 50,000 SMEs nationwide have received a total allocation of RM23bil over the last 20 years through three MITI agencies SME Corp Malaysia, Malaysian Industrial Development Finance Bhd and SME Bank to develop their businesses – Bernama.