The new SME definition, endorsed by the National SME Development Council on July 11, 2013, aims to include all sectors and is expected to increase the share of SMEs in total establishments to 98.5%. Effective from January 1, 2014, it distinguishes between sectors, defining SMEs in manufacturing as firms with sales turnover up to RM50 million or 200 employees, and in services/other sectors as firms with sales turnover up to RM20 million or 75 employees. Only business entities registered with SSM or equivalent qualify as SMEs under this new definition.

1. FACTSHEET ON NEW SME DEFINITION
Current SME Definition
(adopted since 2005)
Introduction
 New SME Definition was endorsed by the National SME Development
Council (NSDC) on 11 July 2013.
 Covers all sectors including construction and mining & quarrying.
 Adopted top-down and bottom-up approaches i.e technical analysis, global
benchmarking and stakeholder engagements with industry associations,
M&A, regulators and financial institutions to derive the definition.
 Expected to raise the share of SMEs to total establishments from 97.3%
currently to 98.5%.
 Only business entities registered with SSM or equivalent are defined as
SMEs.
Comparison of SME Definition Criteria Used
Across Countries
Manufacturing & MRS:
Sales turnover: < RM25 mil
OR
Full-time employees: < 150
Services & Agriculture:
Sales turnover: < RM5 mil
OR
Full-time employees: < 50
Guiding Principles in Determining the
New Definition
New SME Definition (Effective from 1 Jan 2014)
 For the manufacturing
sector, SMEs are defined as
firms with sales turnover not
exceeding RM50 million or
number of full-time
employees not exceeding
200
 For the services and other
sectors, SMEs are defined as
firms with sales turnover not
exceeding RM20 million or
number of full-time
employees not exceeding 75
Economics and Policy Planning Division, SME Corp. Malaysia
16 October 2013