Malaysia Revises Immigration Policy for Job Seekers, Visa Renewals, and Internships
Malaysia has reformed its immigration policies, changing the hiring and retaining process of expatriates. The Immigration Department and Ministry of Human Resources have introduced stricter criteria for hiring foreign workers, renewing employment permits, and focusing on local talent development. These changes involve mandatory pre-approval procedures, longer processing times for renewals, and new internship requirements. Employers and expatriates must navigate this more complex system carefully to avoid disruptions. For more details on these significant changes and their impacts, continue reading the full article.
Three (3) Key Changes
1. Tighter Regulations for Employing Foreign Workers – Section 60K of the Employment Act
Malaysia is strengthening its control over foreign worker hiring, mandating compulsory pre-approval for companies wishing to employ expatriates, and here are the latest updates:
- All applications for recruiting foreign workers must now be processed through the ePPAx system (Integrated Foreign Workers Management System).
- Employers in the construction industry are required to fulfill extra obligations.
- Employers will now obtain approval certificates through the ePPAx system rather than via email.
- The authorization is effective for one year.
These adjustments elevate the examination of firms employing expatriates, making certain they focus on recruiting local talent prior to considering international workers. Employment Pass applications will be denied without prior approval from Malaysia’s Labour Department (JTKSM).
2. Tighter Regulations for Employment Pass Renewals and Category Modifications
In a surprising statement from the Malaysia Digital Economy Corporation (MDEC), foreign workers looking to alter their Employment Pass category (for instance, moving from Category 3 to Category 2) will now encounter additional obstacles:
- Firms are required to send a ‘Change of Pass Category’ letter during the renewal of Employment Passes.
- First, there should be a cancellation of existing permits, and afterward, a new application should be submitted.
- A 30-day transition timeframe will be offered, within which the new application needs to be finalized.
- Start Date: January 1, 2025.
This updated requirement results in extended processing durations for work visas for expatriates. Employers should initiate the renewal process a minimum of three months before expiration to prevent complications and gaps in employment.
3. The 1:3 Internship Policy – Balancing Hiring for Expats with Local Skills
Malaysia is transforming its expatriate recruitment strategy through the implementation of the 1:3 Internship Policy, referred to as the Progressive Policy on Expatriate Contribution to Local Talent Development. According to this guideline:
- For each expatriate employed, businesses are required to provide three internship slots for local Malaysian students.
- Businesses will need to designate internship positions limited to 2% of their overall employee count.
- The pilot phase starts on February 15, 2025, and runs until December 31, 2025, for Tier 1 and Tier 2 companies (multinational corporations, government-affiliated entities, and conglomerates).
- Complete enforcement will start on January 1, 2026.
Malaysia seeks to harmonize hiring expatriates with the growth of its local workforce, making sure that while international professionals enhance the economy, they also support the development of local talent. While there are no penalties for non-compliance, firms adhering to this policy will receive priority in Employment Pass approvals.