Many SMEs are currently fragmented and dominated by small business entities wherein about 80% of those business entities are microenterprises. These business entities need to build up capacity in view of the ongoing liberalisation of the services and manufacturing sectors in order to avoid hollowing out of companies and to be globally competitive.
Mergers and rationalisation with the industry will help building the domestic capacity, among others: -
- Obtaining quality staff or additional skills, knowledge of industry or sector and other business intelligence.
- Accessing funds or valuable assets for new development.
- Accessing a wider customer base and increasing market share.
- Diversification of the products, services and long-term prospects of your business.
- Reducing costs and overheads through shared marketing budgets, increased purchasing power and lower costs.
To encourage mergers and acquisitions among SMEs, it is proposed that the merged entities be given appropriate incentives.
Objective
These guidelines are to draw a process flow on the steps taken to vet through the applications and to verify the authenticity of the merger and acquisition exercise.
Federal Government Gazette: Stamp Duty (Exemption) (No. 18) Order 2021
The application period for stamp duty exemption initiatives for instruments in relation to an approved merger or acquisition (M&A) of the SMEs is extended to 30 June 2022 and the extension date for approval until 31 December 2022
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