SME Loan Stamp Duty Exemption Malaysia 2026
Stamp duty on loan agreements can add significant costs to your SME financing. Fortunately, Malaysia offers stamp duty exemptions for qualifying SME loans, potentially saving you thousands of ringgit. Here's everything you need to know.
Quick Facts
Pro Tip
Always ask your bank about stamp duty exemption BEFORE signing your loan agreement. Exemptions must typically be claimed at the time of loan documentation.
What is Stamp Duty on Loans?
When you take a business loan, the loan agreement is a legal document that requires stamp duty. This is a government tax paid to make the document legally enforceable.
Standard Stamp Duty Rates for Loans
| Loan Type | Stamp Duty Rate |
|---|---|
| Term loan agreement | 0.5% of loan amount |
| Overdraft/revolving facilities | 0.5% of limit |
| Security documents | 0.5% of secured amount |
| Guarantee documents | RM10 nominal |
Example Cost (without exemption):
| Loan Amount | Stamp Duty @ 0.5% |
|---|---|
| RM100,000 | RM500 |
| RM500,000 | RM2,500 |
| RM1,000,000 | RM5,000 |
| RM5,000,000 | RM25,000 |
Available Stamp Duty Exemptions
SME Loan Stamp Duty Exemption
The government provides exemptions to reduce SME financing costs:
| Exemption | Coverage | Qualifying Loans |
|---|---|---|
| SME Facility Exemption | Full or partial | GGSM2, approved schemes |
| Government-backed schemes | Full exemption | SJPP, CGC programs |
| Development bank loans | Varies | SME Bank, TEKUN |
GGSM2 Stamp Duty Exemption
Loans under the government guarantee scheme often qualify:
| Feature | Detail |
|---|---|
| Coverage | Loan agreement stamp duty |
| Rate | Full exemption (100%) |
| Loan limit | Up to RM5 million |
| Application | Through participating banks |
Confirm Eligibility
Not all GGSM2 loans automatically get stamp duty exemption. Confirm with your bank whether the specific program you're applying under includes this benefit.
CGC-Guaranteed Loan Exemptions
Credit Guarantee Corporation backed loans may qualify:
| CGC Program | Stamp Duty Status |
|---|---|
| Portfolio Guarantee | May include exemption |
| Direct Access Guarantee | Typically exempt |
| Special Relief Facility | Exempt |
How Much Can You Save?
Exemption Savings Calculator
| Loan Amount | Normal Stamp Duty | With Exemption | Savings |
|---|---|---|---|
| RM100,000 | RM500 | RM0 | RM500 |
| RM250,000 | RM1,250 | RM0 | RM1,250 |
| RM500,000 | RM2,500 | RM0 | RM2,500 |
| RM1,000,000 | RM5,000 | RM0 | RM5,000 |
| RM3,000,000 | RM15,000 | RM0 | RM15,000 |
| RM5,000,000 | RM25,000 | RM0 | RM25,000 |
Total Loan Cost Impact
When considering loan costs, stamp duty adds to:
- Processing fees (typically 0.5-1%)
- Legal fees (varies)
- Valuation fees (if property involved)
- Insurance premiums (if required)
Exemption can represent 20-30% of upfront loan costs.
How to Apply for Exemption
Through Bank Application
Most exemptions are processed by your bank:
Bank-Processed Exemption Steps
- Apply for qualifying loan product (GGSM2, CGC-backed)
- Bank prepares exemption documentation
- Loan agreement marked as exempt
- No stamp duty collected at signing
- Bank files exemption with LHDN
Required Documentation
The bank typically handles documentation, but you may need to provide:
| Document | Purpose |
|---|---|
| SSM registration | Confirm SME status |
| Business profile | Verify qualifying business |
| Loan application | Standard loan docs |
| Declaration form | Bank's exemption form |
Qualifying Criteria for Exemption
Business Requirements
SME Eligibility for Exemption
- Registered in Malaysia (SSM)
- Meets SME definition (varies by sector)
- Manufacturing: Sales under RM50 million OR employees under 200
- Services: Sales under RM20 million OR employees under 75
- Active operating business
Loan Requirements
| Requirement | Detail |
|---|---|
| Purpose | Business use (not personal) |
| Scheme | Must be under qualifying program |
| Amount | Within program limits |
| Lender | Participating financial institution |
Common Exemption-Eligible Programs
Government Guarantee Schemes
| Program | Stamp Duty Status |
|---|---|
| GGSM2 | Typically exempt |
| SJPP (Skim Jaminan Pembiayaan Perniagaan) | Exempt |
| PENJANA SME Financing | Exempt |
Development Financial Institutions
| Institution | Exemption Status |
|---|---|
| SME Bank | Often exempt |
| TEKUN | No stamp duty (different structure) |
| Agrobank | May be exempt for certain products |
Special Relief Programs
| Program | Stamp Duty Status |
|---|---|
| Economic recovery schemes | Typically exempt |
| Natural disaster relief loans | Usually exempt |
| Special economic programs | Check specific program |
What If You Don't Qualify?
Minimizing Stamp Duty
If exemption isn't available:
| Strategy | How It Works |
|---|---|
| Combine facilities | One document vs multiple |
| Negotiate with bank | Some absorb costs |
| Include in loan | Finance the stamp duty |
| Compare programs | Some schemes include exemption |
Alternative Financing Structures
Some structures have lower stamp duty impact:
| Structure | Stamp Duty Impact |
|---|---|
| Islamic financing (certain types) | May have different treatment |
| Overdraft vs term loan | Consider facility type |
| Short-term facilities | Lower amounts |
Stamp Duty on Refinancing
Same Bank Refinancing
| Situation | Stamp Duty |
|---|---|
| Top-up existing loan | Only on additional amount |
| New facility same bank | Full amount (unless exempt) |
| Restructuring | May be exempted |
Bank-to-Bank Refinancing
| Situation | Stamp Duty |
|---|---|
| Moving to new bank | Full stamp duty on new loan |
| Balance transfer | Full amount applies |
| Consolidation | Based on new total |
Pro Tip
When refinancing, factor in stamp duty costs. The savings from lower interest rates need to exceed new stamp duty and fees to make refinancing worthwhile.
Stamp Duty on Security Documents
Property as Collateral
| Document | Stamp Duty |
|---|---|
| Charge over property | 0.5% of loan amount |
| Assignment of insurance | Nominal (RM10) |
| Power of attorney | RM10 |
Other Security Types
| Security | Stamp Duty |
|---|---|
| Fixed deposit pledge | Nominal |
| Share charge | Varies |
| Personal guarantee | RM10 per guarantor |
Frequently Asked Questions
Frequently Asked Questions
Key Takeaways
Remember These Points
- Always ask about stamp duty exemption before signing
- GGSM2 and government-backed loans often qualify for exemption
- Savings can be significant (0.5% of loan amount)
- Exemption is processed by your bank - not applied separately
- Factor in stamp duty when comparing loan costs
- Exemption must be claimed at signing - not retroactively
Need Help Finding Exempt Financing?
Our consultants can identify SME loan options that include stamp duty exemption, saving you thousands in upfront costs. Free consultation.