Malaysia’s government is providing a stamp duty exemption to Malaysian-owned SMEs for merger and acquisition (M&A) activities, aimed at building up the capacity of local companies and supporting SMEs who have been affected by the current economic landscape.
This new incentive is an effort by the Ministry of Entrepreneur Development and Cooperatives (MEDAC) through SME Corp Malaysia, in collaboration with the Inland Revenue Board of Malaysia and the Companies Commission of Malaysia.
Catering to Malaysian-owned SMEs in all sectors, MEDAC Minister Datuk Seri Wan Junaidi Tuanku Jaafar said incentive was created to help build the capacity of local companies and encourage mergers among SMEs to form new companies or the acquisition of SMEs by other SMEs to become bigger business entities, both by way of legal instruments and contracts.
The stamp duty exemption for M&A activities covers a wide range of costs. These include the cost of Contracts or Agreements for the sale or lease of properties (including land, buildings, machinery and equipment); Instruments of Transfer and Memorandum of Understanding; Loan or Financing Agreement; and the First Lease Agreement.
“Application for this incentive is eligible for SMEs that perform M&A activities in the period between 1 July 2020 until 30 June 2021 only,” Wan Junaidi said.
Wan Junaidi states that the government views this M&A effort as a method for helping to strengthen SME capacity and prevent the hollowing out of companies as a result of the COVID-19 pandemic and the subsequent lockdowns that followed. The overall goal of the initiative is to enhance access to funds and valuable assets for new developments.
“In addition, this activity also provides an opportunity for new business entities to gain additional knowledge, skills and quality staff, as well as to lower costs,” he added.
The deadline to apply for the exemption is 31 July 2021.