FMM calls for stronger capital and technology support to drive growth among Malaysian SMEs

October 26, 2026

Head Office, KL

FMM In The News: TRADERS UNION, October 25, 2026

The 2027 Budget’s focus on small and medium-sized enterprises has opened the door to fresh calls from industry for broader growth support. The Federation of Malaysian Manufacturers said tax incentives, easier access to financing and technology assistance are needed to help SMEs grow and compete globally.

Highlights

FMM called for further cuts to SME corporate tax rates, broader tax-rate eligibility and the removal of the RM2.5 million paid-up capital requirement to encourage reinvestment.
FMM proposed a RM1.5 billion Smart Manufacturing Support Package for 2027–2030 and a RM1 billion National Manufacturing Research and Innovation Endowment Fund to accelerate automation, digitalisation and innovation.
FMM proposed a RM100 million National Supply Chain Resilience Fund and broader SME eligibility to include companies with revenue of up to RM100 million or 300 employees, strengthening local suppliers and supply chains.

This article was translated from the original. Read the original version by our correspondent here.

Industry proposals to accelerate SME growth

As reported by The Edge Malaysia, citing a statement issued on Sunday by the Federation of Malaysian Manufacturing, the federation welcomed the 2027 Budget’s focus on SMEs but stressed that companies still need more support to innovate, expand and contribute to national economic growth, in line with Prime Minister Datuk Seri Anwar Ibrahim’s vision.

FMM called for further cuts to SME corporate tax rates, broader eligibility for preferential tax rates, and the removal of the RM2.5 million paid-up capital requirement for SME tax eligibility. The federation welcomed the one-percentage-point tax cut but said businesses need greater savings to reinvest in growth.

FMM also welcomed RM2.1 billion in financing through the NIMP Fund, the KWAP Drive Fund and Khazanah’s MTC Fund, as well as expanded financing guarantees. However, it stressed that financing must be affordable, accessible and disbursed promptly.

To encourage technology adoption, FMM proposed a RM1.5 billion Smart Manufacturing Support Package for 2027 to 2030. The proposal includes RM500 million for automation, RM750 million for digitalisation and RM250 million for artificial intelligence, alongside workforce training and technical support.

The federation also proposed a RM1 billion National Manufacturing Research and Innovation Endowment Fund to help businesses develop new products, commercialise research and collaborate with universities and research institutions.

Implications for manufacturers and local supply chains

FMM also proposed broadening the definition of manufacturing SMEs to include companies with annual revenue of up to RM100 million or up to 300 employees. It said continued support would help SMEs grow into mid-sized companies without losing assistance too soon.

In addition, FMM proposed a RM100 million National Supply Chain Resilience Fund to strengthen local suppliers, improve collaboration with major companies and multinational corporations, and reduce supply chain disruptions.

The federation said stronger domestic investment would help Malaysian manufacturers upgrade their technology, expand production, create better-paying jobs and boost exports, while strengthening the country’s industrial capabilities.

In our earlier coverage of efforts to coordinate the enforcement of rules governing the entry of foreign products and entities into the local market, we discussed the government’s efforts to ensure fairer competition as digital trade continues to grow. The article also covered plans to draft an e-Commerce Bill and initiatives such as standardising promotions for local products and 2027 Budget allocations to help SMEs access digital platforms and international markets.

Source of article: tradersunion.com