I have almost 5 year old daughter and we noticed that she sweats and has started to have a sweat smell under her arms. is it normal for her to start smelling like sweat at such a young age?

Maybe/not: The apocrine (odor)glands in the armpit are under the influence of the adrenal glands & may become active years before actual puberty begins. That said, I believe 6 is the earliest we normally see it. Odor can also represent infection within some of those hair roots/glands. If the kid has a noted increase in growth over 2.5 in/yr, pubic hair, or other worrisome signs have her seen.

Unpleasant odor?: Unpleasant odor associated with perspiration is a result of bacterial decomposition of apocrine sweat secreted from apocrine gland in the axilla. Apocrine gland remains dormant until puberty. I would have her checked for a sign of early puberty.