06/01/2026

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TUESDAY | JAN 6, 2026

SMEs seek urgent help to navigate regulatory issues

Malaysia’s power infra sector to stay constructive into H1’26: HLIB

to business strategy, with companies that invest in structured training typically recording lower employee attrition rates. Leadership development is also evolving, with a growing focus on agility, emotional intelligence and cross-functional collaboration. Citing Deloitte’s 2025 Human Capital Trends report, Melissa noted that while 92% of leaders view agility as critical to organisational success, only 28% feel ready to lead in an agile way. She added that transformative education models are gaining traction, with demand-driven learning and closer collaboration between universities, technical and vocational education and training institutions and the private sector placing greater emphasis on skills certification and work-based learning, in line with the objectives of the 13MP. Melissa said Aisling is positioning itself for these shifts by embedding digital readiness and leadership agility into its learning and develop ment programmes, while supporting initiatives that bridge the education-to-employment gap and prepare Malaysian professionals for inter national opportunities. KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB) remains constructive on Malaysia’s power infrastructure sector into the first half of 2026 (H1’26), driven by strong order flows from Tenaga Nasional Bhd (TNB), data centres and solar. In a research note, it said the financial year 2026 (FY2026) is shaping up to be particularly strong, driven by the rollout of LSS 5 and LSS 5+, which further expands demand for grid and substation works. “TNB’s call-ups should expand in FY2026 as deferred FY2025 capital expenditure normalises following the tax overhang, reinforcing our view that grid investment will remain elevated, with RM3 billion to RM3.5 billion of annual base capex directed towards the grid,” it said. Meanwhile, HLIB also projected that listed power infrastructure players with access to capital and economies of scale would be best positioned to capitalise on this multiyear upcycle. Since the data centre investment wave gathered momentum in 2023, the investment bank said the power infrastructure market has seen a surge in available jobs. However, it noted that two years on, many smaller unlisted players are increasingly facing financial bottlenecks in securing new projects. It said this is evidenced by the recent wave of fundraising activity among listed mechanical and electrical contractors and cable manufacturers, where proceeds are earmarked mainly for working capital support or capacity expansion (cable makers). “On the customer front, TNB’s move to require M&E contractors to procure high voltage cables rather than be supplied by TNB further raises the financing bar. “As such, we believe the next wave of power infrastructure jobs from both TNB and the private sector is likely to be increasingly concentrated among listed companies,” it said. The bank has maintained its “over weight” call on the power infrastructure sector. – Bernama

PETALING JAYA: SMEs are entering a “survival zone” in 2026 as the cumulative cost of regulatory compliance reaches breaking point, said Small and Medium Enterprises Association Malaysia (Samenta) national president Datuk William Ng ( pic ). While 2025 saw the emergence of the “compliance economy”, he added, 2026 will see the full rollout of many of these regulatory burdens. “Unless repealed or postponed, SMEs will have to grapple with a surge of new starting Jan 1, 2026. This include Stamp Duty Self Assessment System, Multi-Tier Levy System for foreign workers and the preparation phase for the newly introduced sector-specific Carbon Tax,” Ng said in a statement yesterday. Additionally, SMEs face new costs ranging from stamp duty on employment contracts for salaries above RM3,000 to “BMW” toilet requirements for business licence renewals of food businesses. “The digital burden also intensifies with mandatory e-invoicing for SMEs with revenue above RM1 million and the new prohibition on consolidated e-invoices for high value transactions,” Ng said. Furthermore, the transition towards Extended Producer Responsibility is expected to begin this year, obligating manufacturers to fund the collection and recycling of packaging waste. SMEs exporting to the European Union or part of European supply chains will also be caught in the Carbon Border Adjustment Mechanism, he noted. “This surge in compliance is not unique to Malaysia. The Compliance Economy is a global phenomenon, driven by a worldwide push for supply chain transparency, the harmonisation of digital tax systems, and the synchronisation of global sustainability standards,” Ng said, adding that these new hurdles add to recently introduced rules, such as expanded worker housing requirements under Act 446, the Personal Data Protection Act requirement for

o Samenta says compliance cost at breaking point, calls for two-year freeze and incentives, among others, to ease burden

data protection officers and the Occupational Safety and Health (Amendment) Act 2022, which requires OSH coordinators for SMEs with over five employees. Ng pointed out that while SMEs are not generally required to track carbon emissions under the National Sustainability Reporting Framework (NSRF) directly, almost all who are plugged into the supply chains of large local companies and multinationals are required by extension to do so. “This will leave SMEs who are unprepared in a limbo; caught between the inability to fund

Transition Academy: A dedi cated centre managed by the industry to produce certified OSH coordinators, data pro tection officers, and sustain ability officers, to ensure the availability of in-house capa bilities within SMEs, and bring down the costs of transition. 0 National AI-powered ESG reporting fund: Direct funding for AI-driven tools to automate reporting in line with the NSRF and the Simplified ESG Dis closure Guide, reducing the prohibitive costs of manual compliance and the reliance on third-party consultants.

necessary transitions and the risk of being excluded from the formal economy and global supply chains entirely,” said Ng. “Combine this with the ‘Triple Threat’ of structural margin compression, a severe liquidity squeeze, and structural low productivity means that the 10–15% net margins typically enjoyed by SMEs are being eroded by spending defensively on compliance. Most small businesses lack the specialised legal, ESG, or IT departments needed to manage these overlapping regulatory timelines, leading to a gap between the government’s high-level policy goals and the practical reality of implementation on the ground. These are money that could have been spent offensively to grow their businesses.” To prevent a widespread business slow down, Samenta calls for an urgent transition from rule-based regulation to incentive-based facilitation through the following: 0 Establishment of an industry-led SME

0 A “regulatory breathing space” moratorium: A 24-month moratorium on any new costs or regulatory burdens at the national, state and local authority levels to allow SMEs to stabilise their operations. 0 Transition to an “opt-in” system: Shifting mandatory requirements to an incenti vised, opt-in system to encourage parti cipation without penalising struggling businesses. 0 Extend MyDigital ID to businesses: To speed up digital adoption among SMEs whilst transferring a majority of government-business interaction online. For SMEs to survive beyond 2026, Ng said, the gap between government policies and reality on the ground must be closed. Samenta urges the government to act as a strategic partner in this transition, ensuring that compliance becomes a catalyst for competi tiveness rather than a barrier to business survival. Melissa said Aisling has recorded particularly strong growth in its advisory and transformation services, notably in talent mapping, leadership upskilling, employer branding and organisational restructuring. “This demand reflects the realities facing Malaysian businesses as they navigate digital disruption, tightening regulations and an increasingly competitive war for skilled tech and data talent.” Melissa highlighted five workforce and leadership trends expected to have a positive impact on Malaysia’s talent ecosystem. These include accelerating AI and digital integration, as companies increase investments in AI tools and workforce training with a stronger emphasis on continuous learning and human-centric adoption rather than pure automation. She said new workforce models are reshaping organisational structures, with flexible and hybrid work arrangements requiring managers to lead with greater trust, adaptability and outcome based performance. In addition, firms are increasingly linking skills development and reskilling programmes directly

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com Corporate Malaysia’s AI, reskilling spending expected to remain robust

that reflects mismatches between workforce capabilities and employer needs. Melissa said the data indicate that while jobs are being created, the skills of many Malaysians are not being fully utilised, reinforcing the need for continued investment in talent development. Looking into 2026, she noted that Aisling sees the strongest oppor tunities in AI and the digital economy, advanced manufacturing,

KUALA Corporate Malaysia’s spending on artificial intelligence (AI) and large-scale reskilling is expected to continue in 2026 amid a tight labour market and persistent skill-related under employment, said Aisling Con sultancy founder and managing director Melissa Norman ( pic ). She said the bulk of current LUMPUR:

healthcare and the green energy transition. These sectors are aligned with Malaysia’s national development priorities under the 13th Malaysia Plan (13MP) and are expected to feature prominently in Budget 2026, she added. They also mirror Malaysia’s broader economic ambitions and global investment flows. Malaysia ranked 25th in the 2025 IMD World Talent Ranking, with an overall score of 65.18%. However, its investment and development pillar lagged at 49.80%, underscoring the need to strengthen talent infrastructure.

demand is being driven by corporates rather than the public sector, as companies respond directly to talent shortages, rising competition for skilled workers and the need to lift productivity. “We are seeing significant momentum in projects related to AI adoption, workforce analytics and large-scale reskilling programmes. Looking ahead, the pipeline remains robust,“ Melissa told SunBiz . Malaysia’s unemployment rate held steady at 3% in June 2025, while skill-related under employment remained elevated at about 35.6%