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In a knowledge-based economy, the concept and application of intellectual capital received an overwhelming response from the academicians, researchers, practitioners and entrepreneurs at the beginning of the 21^ sup st^ century. Intellectual capital is considered as the most important and strategic asset for the success of an organization. In a competitive business environment, the survival of an organization is mainly based on intellectual capital. Moreover, it is a vital asset for the success of the Small and Medium Enterprises (SMEs) in a competitive environment. In Malaysia, SMEs are facing severe multidimensional challenges and threats to their survival. Therefore, there is a need to study the role of intellectual capital in SMEs, to create awareness about the applications of intellectual capital in order to acquire competitive advantage. This study attempts to examine the impact of intellectual capital on the …