Miti undertaking onboarding of 1,500 SMEs into the first phase of DFTZ

KUALA LUMPUR: The Ministry of International Trade and Industry (Miti) is currently in the process of onboarding more than 1,500 local small and medium enterprises (SMEs) into the first phase of the Digital Free Trade Zone (DFTZ).
It will be launched by the Prime Minister Datuk Seri Najib Abdul Razak and Alibaba Group founder, Jack Ma in early November.
Minister Datuk Seri Mustapa Mohamed said the process would be a boost for local SMEs in terms of their export growth and employment creation.
In his response to the 2018 Budget announcement yesterday, he said in a statement, SMEs had received a big allocation of RM23.7 billion in terms of government allocation, grants, soft loans and guarantees.
"These initiatives are vital in building the capabilities of our SMEs to ensure they remain competitive in meeting the economic challenges of today and tomorrow.
"In addition to these said allocations, the RM1 billion provided by major institutional investors and the tax incentive for investment in venture capital will stimulate entrepreneurship and promote the growth of start-ups and innovation in our economy," he added.
Mustapa said with the support and allocations, MITI is confident that SMEs would be able to contribute 41% to Malaysia's gross domestic product by 2020.
The government, according to him, was also committed to positioning the SMEs in new growth areas, including the digital economy.
"Malaysia's pro-globalisation and international outlook were also reaffirmed by this budget. The Principal Hub initiative introduced in May 2015 has approved 27 applications from multinational companies to establish their regional and global headquarters in Malaysia.
"It has resulted in businesses spending of over RM230 million and the utilisation of local ancillary services worth around RM20 million per annum, as well as creation of high-value jobs. The extension of this Principal Hub incentive package beyond 2017 to December 2020 is a significant move to strengthen Malaysia's position as the gateway to the region and the world," Mustapa said.
He said the internationalisation agenda is further strengthened with the allocation of RM150 million for the Malaysia External Trade Development Corporation, Malaysian Investment Development Authority and SME Corp, to undertake export and investment promotion activities, including Market Development Grants (MDG).
In 2016, the MDG benefited 1,910 SMEs. This allocation will certainly strengthen the government's efforts at increasing the visibility of Malaysia in the international marketplace, especially in light of an increasingly competitive environment.
"For 2017, we expect our total trade to grow by 17.1% to RM1.7 trillion while exports will accelerate by 16.6% to RM917.5 billion," Mustapa said.
SMEs form 98.5% of total establishments, where 76.5% are micro-enterprises. — Bernama