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8/3/2019 ENT300_Module06
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ENT/ETR300 – FUNDAMENTALS OF ENTREPRENEURSHIP
BUSINESS REGULATIONS & SUPPORT SYSTEM
BUSINESS REGULATIONS& SUPPORT SYSTEM Dr. Azizan Abdullah
Azlin Shafinaz Mohamad ArshadSiti Zahrah Buyong
Zarina Abdul Munir
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ENT/ETR300 – FUNDAMENTALS OF ENTREPRENEURSHIP
BUSINESS REGULATIONS & SUPPORT SYSTEM
Introduction
Business support system refers to the assistanceand services given by the government or privateagencies to help entrepreneurs to start a new
business or to develop an existing one.
There are a lot of business support systemprovided to the entrepreneur in term of monetary
and non monetary facilities.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Approval and Licensing
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Entrepreneur are required to have approval and
licensing from relevant government agencies insetting up manufacturing businesses.
Manufacturing Licence
►The Malaysian Government under The IndustrialCoordination Act (ICA)1975 requires person (s)engaging in any manufacturing activity to obtaina licence.
►This regulation only apply to the manufacturingcompanies with shareholders’ fund of 2.5m
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BUSINESS REGULATIONS & SUPPORT SYSTEM
and above or engaging 75 or more full-time
employees.
►Manufacturing activity is defined as the making,altering, blending, ornamenting, finishing or any
other related activities.
► Applications of manufacturing licence should bemade to Malaysian Industrial DevelopmentAuthority (MIDA).
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BUSINESS REGULATIONS & SUPPORT SYSTEM
No-Objection Letter for the Location of Projects
► No-objection letter from the respective State
Government is require for approval of the projectlocation.
► This letter needs to be submitted to MIDA for theissuance of the manufacturing licence.
Approval for Planning Permission
► Application for planning permission is require underTown and Country Planning Act, 1976 (Act 1972).
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BUSINESS REGULATIONS & SUPPORT SYSTEM
► Planning permission need for a development and
use of all lands and building.
► Planning permission should be made to the local
authority such as City Council of Shah Alam (MBSA),Municipal Council of Kota Star (MPKS) etc.
Approval for Building Plan
► The Street, Drainage and Building Act 1974 (Act 133)
require construction of buildings can only beundertaken with the written approval for the localauthority.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
► Every plan, drawing or calculation in which related
to The building must be submitted by qualifiedperson such as architect, draughtsman or engineer.
Approval for Certificate of Fitness for Occupation
► All completed building need to be certified as being fitfor occupation by the local authority.
► This requirement has been spell out under theUniform Building by Laws 1984.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Approval for Business Related Licences
► The licences related to factory premises,advertising signage, storage and canteen.
► This licences should be apply through the localauthority.
Approval for Environmental Control
► Environment Quality Act, 1974 requires themanufacturers to control industrial activities thatmay result in a new source of effluent or discharge.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
►The installation of incinerator, fuel burning
equipment and chimney also need approval.
►The environmental control and approval are underthe responsibility of Department of Environment.
Approval for Safety and Health
►Factories and Machinery Act 1967 requiremanufacturers to obtain design approval of
certificate machinery and certificate of fitness
►The application of approval should be send toDepartment of Occupational Safety and Health.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Excise Licence and Sales Tax Licence
► Excise duties are require for a factory thatmanufactured goods which prescribe under ExciseAct, 1976.
► Excise licence also need for products under thiscategory and should be obtained from RoyalCustoms Malaysia.
► Customs Department will levied a sales tax onimported and locally manufactured goods.
► A sales tax licence should be apply under Sales TaxAct, 1972
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Infrastructure Facilities
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Industrial Estates
►Industrial estates has been developed by StateEconomic Development Corporations (SEDCs),Regional Development Authorities (RDAs), portauthorities and municipalities.
► Currently there were over 200 industrial estateswere developed by those agencies and the newones are continuously planned to meet the
demand of industrial land.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Free Industrial Zones (FIZs)
►Established for manufacturing companies thatproduce or assemble products mainly for exportpurposes.
►The manufacturing companies in FIZs enjoyminimal customs formalities and duty free importof raw materials, component parts, machineryand equipment.
► They also have a minimal formalities for exporttheir finished products.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Licensed Manufacturing Warehouses (LMWs)
►The purpose of LMWs is to encourage the dispersalof industries and to enable companies to enjoyFIZ facilities in areas where it is neither practical
nor desirable to establish FIZs.
► In order to get an approval for LMWs the companiesshould have at least 80% of their production meantfor export and raw materials or components aremainly imported.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Electricity and Water Supply
► Electricity for Peninsular Malaysia supply by TenagaNasional Berhad (TNB) while for Sabah and Sarawakare Sabah Electricity Sdn. Bhd. (SESB) and Sarawak
Supply Corporation (SESCO) respectively.
► In term of water, it has been treated according to theWorld Health Organisation (WHO) standards fordrinking and supply by state water departmentand water supply companies.
► Water costs are low and vary from state to state.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Telecommunication Services
►Provided by Telekom Malaysia Berhad and othernetwork service providers.
►There are six internet service providers whichinclude TMNet, Jaring and MAXIS Net whosehelp the government to promote informationbased industry.
► Malaysia’s also entry into space age
communication through the launching of MEAST-1and 2 and Tiungsat-1 in 1996 and 2000 respectively.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Sea Ports, Cargo Transportation, Highway and
Railway Services
►Sea ports has modern facilities and equipment tofacilitates full range of cargo handling.
►Cargo transportation provide comprehensivecontainerised cargo transportation services.
►The Malaysian Highway Authority provided
latest design of expressways which link to all majortownships and potential development area.
►Railway services operates by Keretapi Tanah Melayu(KTM) with the capacity to transport goods ranging
from grain to machinery.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Multimedia Super Corridor (MSC)
► MSC was established with the aims to revolutionisehow Malaysians and others in the region conductcommerce in the digital age.
► MSC governed by groundbreaking Cyberlaws,policies and practices that enable operatingcompanies to harness the full potential of InformationCommunications Technology and Multimedia.
► The ultimate aim of MSC is to attracts multimediacompanies locally and internationally to becomeworld class over time.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Financial Assistance
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Financial Assistance for Entrepreneurs
Financing is needed by
entrepreneur for sustainability anddevelopment of business.
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Purposes of Financing
1. Strengthening skills of workforce
2. Entrepreneur development
3. Marketing & Promotion
4. Product Development & Qualityaccreditation
5. Technology development6. Debt restructuring
7. General
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Types of Financing
1. Soft loan
2. Grants3. Equity financing
4. Venture capital
5. Guarantee scheme
6. Tax incentives
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Who Provide the Financial
Assistance?
Two main provider for financial assistance areministry and agencies.
Ministry1. Ministry of Entrepreneur and Co-operative
Development (MECD)2. Ministry of Science, Technology and
Innovation (MOSTI)Agencies
26 agencies
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Ministry of Entrepreneur and Co-
operative Development (MECD)
Financing scheme under MECD:
1.ASEAN- Japan Development Fund2. Equity Financing
3. Franchise Development
4. Skim Pembiayaan Pusat Negeri(SPPN)
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Ministry of Science, Technology
and Innovation (MOSTI)
Financing scheme under MOSTI: Enterprise Innovation Fund(EIF)
Objective :
To increase the participation of SMEs,micro businesses and individual/sole-
proprietors in innovative activities through
the development of new or improvedproducts, processes or services with
element of innovation forcommercialisation
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Ministry of Science, Technology
and Innovation (MOSTI)
Enterprise Innovation Fund(EIF)
Eligibility criteria Malaysian business enterprises or
individual with project or product
proposal that has elements oftechnological innovation forcommercialisation
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Financial Assistance from
Government AgenciesThere are twenty six (26) agencies that provide financial
assistance for entrepreneur. Examples are :
1. Banks such as Bank Kerjasama Rakyat MalaysiaBerhad, Bank Negara Malaysia, Bank Perusahaan
Kecil & Sederhana Berhad, and Bank Pertanian
Malaysia Berhad2. Non-banks such as Perbadanan Nasional Berhad,
Small and Medium Industries DevelopmentCorporation, Multimedia Development Corporation
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BUSINESS REGULATIONS & SUPPORT SYSTEM
Bank Kerjasama Rakyat Malaysia Berhad
Youth Business Scheme
Objective To assist youth to venture into business on full time basis.
Eligibility criteria Individual Malaysian citizen aged between 18-40 years old
Must register online as an applicant through the Portal of ‘Majlis
Penggalakan Ekonomi Belia (MPEB)’ - www.mpeb.gov.my
Pass the screening test conducted by Ministry of Youth and
Sport
No adverse record with financial institutions
Purpose of financing
Expansion in productive capacity
Working capital
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Bank Negara Malaysia
New Entrepreneurs Fund 2
Objective To promote the growth of small and medium-sized Bumiputeraenterprises by ensuring that they have access to financing at
reasonable cost.
Eligibility criteria
Business enterprise based on the definition of SMEs [Link] www.smeinfo.com.my
Maximum shareholders' funds not exceeding RM2 million;Shareholding by Public Listed Companies or Government-Link
Companies (if any) should not exceed 20%;
Purpose of financing
Expansion in productive capacity
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SME Bank
Graduate Entrepreneurs Fund
Objective
To encourage graduates to participate and venture into businesses in the
selected industry.
Eligibility criteria
Graduate holds majority equity in a company registered with the Companies
Commission of Malaysia under the Companies Act 1965
Has a diploma/degree/doctorate qualification
Must be below 40 years old and has successfully completed training
programmers, placement and practical training under the Ministry of Entrepreneur and Co-operative Development (MECD) or its agencies
Purpose of financing
Working capital
Financing fixed assets or both
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Agro Bank Malaysia
Agriculture Entrepreneurs Scheme for Graduates
ObjectiveTo encourage graduate to embark in the commercial
agriculture sector as an alternative careerdevelopment.
Eligibility criteria Unemployed graduates with keen interest to develop
a full time career in agriculture sectorPurpose of financing
Working capital and expansion in productive capacitye.g. purchase of fixed asset
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Perbadanan Nasional BerhadYouth Franchise
Objective To encourage Bumiputera youth to venture into franchise
business by providing start-up financing
Eligibility criteria
- A wholly-owned Bumiputera private limited company
- Bumiputera age between 21 to 40 years old
- Contribute at least 10% of the total project cost
Application procedure Application to be submitted to PNS
ENT ETR FUNDAMENTALS OF ENTREPRENEURSHIP
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Perbadanan Usahawan Nasional
Berhad (PUNB) Bumiputera Entrepreneurs Retail Project Fund(PROSPER)
Objective
To enhance and upgrade Bumiputera entrepreneurs'participation in the retail business.
Eligibility criteria
1. Entrepreneur
- Bumiputera above 18 years old- Possess the necessary entrepreneurial skills.
2. Business
- Retail business wholly owned by Bumiputera.
- Viable project costing not exceeding RM 1 million.
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PROSPER Siswazah Entrepreneurial SchemeObjective
To assist Bumiputera graduates to embark or venture into retailand distribution business industry through the systematic and
structured PUNB's programmes
Eligibility criteria
1. Young Bumiputera Graduate
- Less than 30 years old with at least diploma qualification frominstitution recognised by the government.;- Able to source own capital amounting RM500 for each project
2. Businesses - Wholly-owned and managed by Bumiputera ;
- New business or business at the stage of expansion
Perbadanan Usahawan Nasional
Berhad (PUNB)
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Small and Medium Industries
Development Corporation
Matching Grant for Business Start-ups
Objective
- To provide assistance in the form of matching grant tostart up a business in the following sectors:
- Manufacturing and Manufacturing related services; and
- Services (excluding insurance and financial services)
Eligibility criteria - Business enterprise based on the definition of SMEs.
- At least 60% of equity are held by Malaysian and
- Possess valid premise license
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Multimedia Development Corporation
MSC Malaysia Research and Development Grant Scheme(MGS)
Objective To provide reimbursable R&D grant to assist Multimedia
Super Corridor (MSC) Malaysia-Status Companies to developinnovative multimedia technologies and applications.Eligibility criteria
Possess a valid MSC Malaysia-status certificationMalaysian shareholding of at least 51%
Past or current recipients of any Government R&D grant areNOT eligible under the scheme
Purpose of financing To provide financing for research and development projects
for the development of new products and services across the
multimedia value chain and Flagship Applications
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Employment Policies &
Legislations
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EMPLOYMENT POLICIES& LEGISLATION
1. EMPLOYMENT ACT 1955
2. EMPLOYER PROVIDENT FUND
3. SOCIAL SECURITY ORGANIZATION
4. OCCUPATIONAL SAFETY AND HEALTH
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1. EMPLOYMENT ACT 1955
• Stipulates the minimum conditions of employmentsuch as Besides, the Act is to provide minimumstandards on working hours and overtime, weekly rest
day, public holidays, annual and sick leaves, maternitybenefits, termination and lay off benefits etc• Applies to all employees in Peninsular Malaysia and
the Federal Territory of Labuan whose monthly wagesdo not exceed RM1,500 and all manual workers
irrespective of their wages.• Employees who earn between RM1,500 to RM5,000 amonth can still seek redress from the LaborDepartment with regard to wages and any otherpayments in cash as stipulated in their contract of
service.
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2. EMPLOYER PROVIDENT FUND
• A social security institution formed according to the Lawsof Malaysia, Employees Provident Fund Act 1991 (Act452) which provides retirement benefits for membersthrough management of their savings in an efficient andreliable manner.
• All employers must register their employees with EPFimmediately upon employment.
• Provides a convenient framework for employers to meettheir statutory and moral obligations to their employees.
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• The Act stipulates a compulsory contribution foremployees. A contribution constitutes the amount ofmoney credited to members' individual accounts in theEPF. The amount is calculated based on the monthly
wages of an employee. The current rate of contribution is23% of the employee's wages of which 11% is from theemployee's monthly wage while 12% is contributed bythe employer.
• Under this Act, all employers and employees except
foreign workers, expatriates and those who are listedunder the First Schedule must contribute to theEmployees provident Fund (EPF). However, they canchoose to contribute at the rate of RM5.00 (employer’s share) per employee per month and 11% of monthlywages by the employee.
2. EMPLOYER PROVIDENT FUND
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3. SOCIAL SECURITY ORGANIZATION
• Administers the Employment Injury Insurance Schemeand Invalidity Pension Scheme provided under theEmployees’ Social Security Act 1969.
• The scheme is compulsory and employer must coverall employees under SOCSO even if they are coveredunder other insurance policies.
• A monthly contribution must be made for each eligibleemployee according to rates specified under the Act
(about 2.5% of basic employee’s salary).• Covers only Malaysian workers and permanent
residents. All establishments, including factories,employing workers earning wages not exceedingRM2,000 a month
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4. OCCUPATIONAL SAFETY AND HEALTH
• The Department of Occupational Safety and Health(DOSH) is a department under the Ministry of HumanResources. The Department of Occupational Safety andHealth (DOSH) is responsible for enforcing complianceof the law with OSHA 1994. DOSH also enforcescompliance with the Factories and Machinery Act 1967.
• The OSHA 1994 provides legislative framework topromote, stimulate and encourage high standards ofsafety and health at work. The aim is to promote safetyand health awareness, establish effective safety
organization and performance through self-regulationschemes designed to suit the particular industry ororganization. This Act also defines the responsibilities ofemployers, manufacturer, employees, self-employedworkers, designers, importers and vendors.
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4. OCCUPATIONAL SAFETY AND HEALTH
• As for Factories and Machinery Act 1967, it provide forthe control of factories on matters relating to the safety,health and welfare of persons, and the registration and
inspection of machinery. Some high risk machinery mustbe certified and inspected by DOSH. All factories andgeneral machinery must be registered with DOSH for thepurpose of registration before they can be installed andoperated in Malaysia.
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Manpower
Development & TrainingFacilities
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/ 300 U S O U S
BUSINESS REGULATIONS & SUPPORT SYSTEM
MANPOWER DEVELOPMENT& TRAINING FACILITIES
1. NATIONAL VACATIONAL TRAINING COUNCIL
2. MINISTRY OF HUMAN RESOURCE3. HUMAN RESOURCE DEVELOPMENT FUND
4. MALAYSIA PRODUCTIVITY FUND
5. MALAYSIAN ENTREPRENEURSHIP DEVELOPMENTCENTRE
6. PERBADANAN USAHAWAN NASIONAL BERHAD
7. MAJLIS AMANAH RAKYAT
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1. NATIONAL VACATIONAL TRAINING
COUNCIL
• The Department of Skills Development, formerly knownas The National Vocational Training Council, is one of
the agencies under the Human Resource Ministry,responsible for the co-ordination and control of skillstraining as well as career development in skills training.in line with the implementation of the National SkillsDevelopment Act, 652 (2006) on September 1, 2006.
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• The objective is to generate and coordinate thedevelopment of skilled workforce by: Developing Competency Standard, of a developed country
level, for skilled workforce, Recognising the competency and skills of workforce and
industry experts, and Coordinating skills training systems and Malaysia Skills
Certificate systems.
Function of this council is to :
Assess training requirements, Develop, approve and revise the National Skills Standard, Implement the national training certification programmes,
Promote skills training systems,
Assist and enhance skills proficiency of individuals, and
Guide learning/research programmes related to skills training.
1. NATIONAL VACATIONAL TRAINING
COUNCIL
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2. MINISTRY OF HUMAN RESOUCE
• Currently runs 14 industrial training institutes (ITIs)which offer industrial skills training programme atbasic, intermediate and advanced levels for pre-
employment or job entry level. These includeapprenticeships in mechanical, electrical, buildingand printing trades as well as programme toupgrade skills and to train instructors.
• The Ministry also operates the Centre forInstructors and Advanced Skills Training (CIAST),Industrial Training Institute Japan-MalaysiaTechnical Institute (JMTI) and AdvancedTechnology Centers (ADTEC).
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3. HUMAN RESOURCE
DEVELOPMENT FUND • Aimed at encouraging direct private sector
participation in skills development was launchedin 1993 with a grant form government.
• Functions of HRDF are : to assess and determine the types and extent of
employee training and retraining in keeping with thehuman resources need of industries
to promote and stimulate manpower training to determine the terms and conditions under which
any financial assistance or other benefits are to begiven
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(i) Companies that employ 50 or more Malaysian
workers
1% of employees’
monthly wages (ii) Companies that employ less than 50 to a
minimum of 10 employees, with a paid upcapital of RM2.5 million or more
1% of employees’
monthly wages
(iii) Companies that employ less than 50 to a
minimum of 10 of employees, with a paid-up
capital of less than RM 2.5 million
(Note : For this category, the Government
contributes RM2.00 for every RM1.00 spent.)
Option of registering
with the HRDF and
paying a levy of 0.5% of
the employees’ monthly
wages
Contribution Guidelines for employers:
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4. MALAYSIA PRODUCTIVITY
CORPORATION • Formally known as the National Productivity Corporation
was established in 1962 as a joint project between theUnited Nations Special Fund and the FederalGovernment, with the International Labor Organizationacting as its executing agency.
• Function of PMC are : To generate local expertise in the field of productivity, quality,
management and entrepreneurship;
To enhance the development of human resource both at the
supervisory and management levels in the country; To assess and certify supervisory and management training
programmes, entrepreneurship programmes and productivityand quality management programmes conducted by theprivate sector for the public;
To conduct training or other programmes relating to
productivity, quality, management and entrepreneurship;
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5. Malaysian Entrepreneurship
Development Centre (MEDEC) • Established within MARA University of Technology
(UiTM) in 1975.• The mission was to facilitate the growth of Bumiputera
entrepreneurs in Malaysia.• Specifically, it was set up for the purpose of planning
and implementing entrepreneurship developmentprograms such as training, education, research andconsultancy.
• Activitie and programmes offered are : Entrepreneur Development Program Entrepreneur Development Program for Civil Service Entrepreneur development program for Corporate and
Government Agencies
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6. Perbadanan Usahawan Nasional
Berhad
• Focus is on developing Bumiputera entrepreneurs instrategic and high potential businesses and also toprovide opportunities to Bumiputera entrepreneurs toachieve business success; through the provision offinancial and corporate support.
• Business operations are focused on providingintegrated entrepreneur development packages toassist Bumiputera entrepreneurs in Retail and Smalland Medium sized Enterprise (SME) sectors. Thesedevelopment packages are designed to helpBumiputera entrepreneurs develop business acumen,maintain a profitable venture, and shape theirenterprise; par excellence.
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7. Majis Amanah Rakyat
• Incorporated as a statutory body on March 1, 1966 under anAct Of Parliament, No. 20, 1966.
• Entrusted with the responsibility to promote, stimulate,facilitate and undertake economic and social development ofthe people particularly in the rural areas thereof.
• It is also to encourage, guide, train and assist Bumiputera toenable them to participate actively and progressively in smalland medium scale commercial and industrial enterprisestowards creating a strong and viable Bumiputera Commercial
and Industrial Community (MPPB).• In order to create, increase and improve the level ofBumiputera entrepreneurship and business, MARA haveprovided activities such as in entrepreneurship, manufacturingincubator, consultancy service, marketing promotion andtechnopreneur programme.
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Other Business
Support System
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Other Support Facilities in Malaysia
Entrepreneur
Technical Marketing AdvisoryAssistance Services Assistance
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Technical Assistance Malaysian Agricultural Research and
Development Institute (MARDI)
The main objective of MARDI is to develop
indigenous science and technology capabilities in
support of the development and modernization of
the national food and agriculture sector.
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Malaysian Palm Oil Board (MPOB)
The Malaysian Palm Oil Board (MPOB) is the premiergovernment agency that is responsible for promoting,developing and advancing the country’s palm oilindustry. It is also responsible for providing scientific andtechnological leadership to support the development ofthe palm oil industry.
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Fisheries Research Institute (FRI)
The Fisheries Research Institute (FRI)
conducts studies in various fields of aquatic
organism such as fish, mollusk and shrimp.
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MIMOS Berhad
MIMOS Berhad is a technology R&D organization
that functions as an advisor to the Malaysian
government on technologies, policies and strategies
relating technology development.
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SIRIM Berhad
SIRIM Berhad, a government-owned company, is a
leader in industrial research and development. Its role is
to spearhead industrial research and development and
to pioneer standardization activities and the provision of
technical and consultancy services aimed at enhancing
the competitiveness of Malaysian industries.
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Marketing Assistance
The purpose of marketing assistance is to help
entrepreneurs distribute and market their products locally
and internationally. There are a number of agencies
involved such as MITI, MATRADE, FAMA and GUTHRIE.
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Advisory Services
Advisory services are very important for entrepreneurs in
managing their business. There are many agencies
providing these services with certain charges depending
on the area and scope of the services. However, rebate
or tax reduction is given to certain services acquired
under the training scheme recognized by the Ministry of
Human Resources.
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END OF MODULE 6