IMMEDIATELY upon completing the Indian Trade Mission with 30 eager small and medium enterprises (SMEs), l am welcomed straight into the Chinese New Year festivities. It is this cultural diversity that makes me proud of being a Malaysian - not so much the holidays but the respect and understanding of each other's beliefs and cultures.

For some reason, this time round, I suddenly got nostalgic about my primary school days, where my best friends then were Chinese, Indians and Malays.

We played and studied together without any concerns of race, colour or religion and we had fun. My best friends - Teh Li Li, Nina Malinda, Charan Singh, Omar Zolkifli, Chan Choon Seng and many others - went through our early education at the Tengku Mahmood School in Kluang with lots of fond memories.

The teacher we admired most was was Mrs Tan, who was very strict (as we were very naughty back then). She often echoed her favourite word of wisdom, "it is always easy to break one chopstick, but when you grab a bunch of chopsticks, they are unbreakable because they are stronger. We need to join hands to be strong!"

This is so true in the context of small businesses that are preparing to take on the challenges posed as a result of liberalisation of the services sector.

For them to sustain their business and be able to compete in the world market, they need to enhance their capacity to be bigger, better, stronger and more competitive. They need to identify strategies and create synergies with other SMEs or larger outfits, and possibly consider merging their businesses.

Mergers are also like marriages. It is about bringing together things that matter most and trying to keep each partner happy so that the "marriage" will last "till death do us part".

Business mergers bring to the fore operational efficiencies, technological expertise, risk management, growth opportunities, mutual interests to grow, expand and much more.

As we undertake the approach to liberalise more sectors in the services line, the government encourages SMEs in the professional sub-sectors to merge and form larger entities, with an objective to create better economies of scale and enhance both domestic and global competitiveness.

To encourage SMEs in the professional services sub-sectors to undertake mergers and acquisitions (M&A), the government is introducing an incentive of a flat tax rate of 20 per cent on all taxable income for a period of five years effective from the date of the merger. In addition, tax exemption is also accorded on the stamp duty of the merger and acquisition (M&A) document.

SMEs in the professional services sub-sector (such as accounting and taxation services, specialised medical and dental practices, architectural services, and engineering services), courier services, private technical and vocational secondary education services, and skills training services are highly encouraged to merge into larger entities and benefit from the provisions made available by the government.

What type of firms are eligible for this incentive? Eligible companies are SMEs which are 100 per cent Malaysian-owned with annual sales turnover of less than RM20 million or full-time employees of less than 75 as per the official definition of SMEs in the services sector.

Those that do not fulfil this primary criterion can merge among themselves or acquire another SME to form bigger SMEs or large firms in order to be eligible.

Applications can be submitted to SME Corp Malaysia (SME Corp), which has been assigned with the role of verification and approval under the Exemption Order under Income Tax Act 1967 and Stamp Act 1949.

In this respect, l wish to inform that SME Corp will be organising the "SME Professional Services Day", in conjunction with the launch of the Incentive for Merger and Acquisition of Small and Medium Service Providers on February 14.

This event is organised to provide SMEs in the services sector with the right information about the M&A incentives and motivate them to take the bold step forward towards forming bigger entities that are globally competitive.

I hope that associations attending the event are able to use this platform to obtain as much information on M&A incentives as possible and disseminate among members, as well as able to provide advisory support, wherever necessary.

I wish to reiterate, however, that the journey does not begin or stop with just M&As. There are other viable options available for SMEs to plan their business growth trajectory.

This month, SMEs are invited to participate in the "Entrepreneurs' National Forum" to be held on the 18th in Kuala Lumpur.

This forum, jointly organised by SME Corp, SME Bank and Malaysian Industrial Development Finance Bhd, are intended to provide SMEs with new information and insights to enable them to strategise their business growth.

In addition, February will also see the launch of the "SME Talk Series 2014", organised by one of the members of the SME Business Advisory Panel (SBAP), ABX Express Sdn Bhd, in partnership with SME Corp.

To catapult SMEs onto another growth trajectory, the "IPO Forum 2014: Stairway to Listing" will be organised next month. This forum will bring together all Enterprise 50 winners to better understand the A to Z of going public and being listed on Bursa Malaysia.

Jointly organised by SME Corp, Bursa Malaysia and Unit Peneraju Agenda Bumiputera (Teraju), this forum will provide a hand-holding approach to companies that wish to take that bold step to go public and be listed in the shortest possible time.

Indeed, the government has put in place many platforms and opportunities for SMEs to seek information, share problems and solutions, and above all, interact with the industry for multiple perspectives on business and growth.

One just needs to take the initiative to seek and explore how things can be done differently through collaboration with industry and business peers.

It is true when we say, "Alone we can do so little; together we can do so much". And, I am also being reminded of the lyrics "Together as One" by Stryper:

Together as one

We'll stand for the world to see

Together as one

We'll shine bright

throughout eternity

All the dreams we've

dreamed before

Are now a reality

Now, the dreams of a

perfect love (match?)

Will always be

Before I pen off, I would like to wish all Chinese readers and SMEs, "Gong Xi Fa Cai" and a happy and prosperous year of the horse. Together we shall gallop into the new year, as one!

Datuk Hafsah Hashim is the chief executive officer of Small and Medium Enterprise Corporation Malaysia (SME Corp Malaysia).