Time and time again, we’ve been hearing Malaysian Prime Minister say that 2017 will be the year of SME’s and startups. He said it in October during the tabling of the 2017 budget, and it was repeated again on Astro Awani 4 days before we welcome in the year 2017.
With such a bold declaration from Najib and drawing many eyes from industry experts, he has at least set up some sizeable foundations this year to usher in the year of SME’s and startups.
Here’s what Najib has been doing throughout the year as building blocks to make his vision of 2017 happen.
1) GECommunity’s Inaugural Event
Announced by the good Prime Minister himself in August, the Global Entrepreneurship Community (GECommunity) event was held in Kuala Lumpur this month with the theme: reimagining the future of entrepreneurship.
The GECommunity was designed as a tool to strengthen and develop an inclusive entrepreneurship ecosystem that puts in place platforms and policies that help catalyse cross-border partnerships to affect real change.
Global industry experts were called in to give their insights into entrepreneurship. Notable features of this event include panel sessions, group mentoring, pitch sessions, and specialised keynotes for 8 clusters: Biotech, Creative, Education, Finance, Green, Health, Lifestyle and Supply Chain.
The theme of all the discussions centered around the future, and preparing for the continuation of the digital revolution in years to come.
2) RM7.34 Billion Allocated To Develop SMEs
The government has allocated RM7.34 billion in June to implement 152 SME programmes in 2016 to see Najib’s vision for SMEs come to life.
“This is one of the government’s efforts to ensure that the SMEs contribute between five and 5.5 per cent to the gross domestic product this year,” Najib said about the move.
In the same speech that he announced the monetary allocation, Najib stated, “To increase the country’s labour productivity under the 11th Malaysia Plan of 3.7 per cent, SMEs needed to be more innovative in their businessess.”
To further ensure the success of the national SME development agenda, Najib also encouraged SMEs come forward and work with the government to realise this vision.
3) Development of MalaysiaBiz
The talk that Najib gave regarding the RM7.34 billion mentioned earlier was in conjunction with the launch of MalaysianBiz, a ‘single-access’ platform that aims to simplify the process of registering businesses and obtaining any licences or permits by compiling it all under one roof.
Now Portal MalaysiaBiz is fully up and running. In November the site was able to provide licensing information on 1,174 types of business activities in Peninsular Malaysia and was seeing an acceptance rate of 85 per cent among the SME entrepreneurs.
With the launch of MalaysiaBiz, businesses can now be easily informed of all the documents and processes they need to run their business without needing to go through the hassle of loading up different sites. It certainly saves time and a lot of head-scratching among entrepreneurs.
4) ‘Beyond Nations’, Campaign To Encourage SME Exports
Since Malaysia aims to be among the top 20 world’s largest exporting countries, Najib does not want SMEs to miss out on a slice of that pie.
According to The Sun Daily, Najib said that “The majority of the SMEs, despite making up about 97% of business establishments in Malaysia, only catered to the local market. Currently, there are over 700,000 SMEs in Malaysia.”
The main pillars of the campaign are to communicate, educate and nurture SMEs, especially if they are first-time exporters. They should dare to test the foreign market waters.
“Educating the SMEs is our biggest challenge to make them understand the export business,” Najib said about the move.
5) Tax Incentives
As outlined in Budget 2016, SMEs can apply for tax incentives similar to manufacturing and agricultural companies depending on if they fulfill certain criteria.
On top of that, SMEs are allowed to “automatically claim a double deduction for R&D project expenditure of up to RM50,000 for the YAs 2016 to 2018 but there will still be a requirement to submit an application for the R&D project to the IRB.” Also, approval requirements for SMEs may be less stringent compared to other types of businesses.
Bonus: Honorary Mentions
While these efforts have been announced in 2016, they will only see implementation in 2017 and thus find their place here.
1) Students Exempted From Registration Fees For Setting Up Businesses
Regardless of whether they are from public or private higher learning institutions, students will be given exemptions from registration fees for setting up businesses with the Companies Commission of Malaysia (SSM)beginning in January 1st 2017.
The grant will be disbursed over the next 10 years with RM1mil to be spent per year.
While he announced the move, Najib further advised young entrepreneurs to look to the internet to adopt an online business platform that will enable them to reach a wider market.
2) Digital Free Zone
Perhaps another big takeaway from the Budget 2017 announcement for industry players, Najib’s proposed Digital Free Zone aims to serve as the great equaliser for businesses to enjoy the same tax breaks and other incentives no matter where they are located in Malaysia, so long as they have access to the internet.
This move is to stimulate e-commerce in Malaysia, as well as to answer the nation’s shift into digital.
To complement the move, Najib also announced that the “Malaysian Digital Economy Corporation (MDEC) would be allocated RM162 million to implement programmes to boost this new digital economy effort”.
Through the move, anything from multi-million ringgit enterprises to digital-based startups and SMEs can find something to their benefit.
Feature Image Credit: India Express