21 April 2021
On 25 February 2021, the Stamp Duty (Exemption) (No. 3) Order 2021 (“Order”) was gazetted to encourage mergers and acquisitions (“M&A”) among small and medium enterprises (“SMEs”).
Under the Order, the following instruments executed by SMEs will be exempted from stamp duty:
- contract or agreement for the sale or leasing of property (land, building, machinery and equipment);
- instrument of transfer and memorandum of understanding;
- loan or financing agreement; and
- first leasing agreement,
subject to satisfaction of the conditions below.
The conditions that must be satisfied in order to qualify for the exemption are:
- the merger or acquisition must be approved by the Minister of Entrepreneur Development and Cooperatives on or after 1 July 2020 but no later than 30 June 2021; and
- the instrument must be executed on or after 1 July 2020 but no later than 31 December 2021.
“SMEs” is defined in accordance with section 2 of the Small and Medium Enterprises Corporation Malaysia Act 1994. A business will generally be classified as an SME if the following conditions are satisfied:
- Manufacturing (including agro-based) and manufacturing-related services: The company has a sales turnover of less than RM25 million or full-time employees of less than 150
- Primary agriculture and services (including ICT): The company has a sales turnover of less than RM5 million or full-time employees of less than 50.