Corporate Immigration 2024 Comparisons

Malaysia has a history of welcoming immigrants as part of its strategy to attract foreign talent and boost foreign investment. Over the past few years, significant measures have been taken to manage immigration policies.

Foreign Workers

Foreign workers are classified as blue-collar workers who perform manual labour. Several initiatives have been introduced for the purposes of managing the number of foreign workers in the national workforce and illegal immigrants in the country, as seen below:

Legalising Undocumented Workers - The Second Labour Recalibration Programme (“RTK 2.0”) was launched for employers to regularise and hire illegal immigrants as foreign workers. This is only applicable to employers from the manufacturing, construction, agriculture, service and plantation sectors.

Hiring Freeze - The Malaysian Government determined that the total number of foreign workers in the country shall not exceed 15% of the total national workforce. In order for foreign workers to enter into the country, employers are subject to approval of quotas by the Ministry of Human Resources. Based on the number of approved quotas of foreign workers awaiting entry into the country and successful applicants under RTK 2.0, the number of foreign workers will exceed 15% by the end of the year. As such, the Government has implemented a hiring freeze on foreign worker applications.

Repatriation of Foreign Workers - Malaysia has introduced the Migrant Repatriation Programme. The purpose is to allow foreign nationals without a valid travel pass who have overstayed or have violated their travel passes or permit to return to their origin country by paying a nominal fine/compound of MYR300 to MYR500.

Malaysia has also taken significant strides in combating issues associated with the management of foreign workers through several initiatives, as seen below:

Amendments to Local Employment Legislation - On 1 January 2023, the Employment Act 1955 was amended to introduce provisions which prohibits forced labour and deems it a statutory offence.

Introduction of a National Action Plan - In 2021, Malaysia introduced the National Action Plan on Forced Labour, aimed at eliminating forced labour.

Commitment to International Standards - In 2022, Malaysia deposited the instrument of ratification of the Protocol of 2014 to the Forced Labour Convention, 1930 (the “Protocol”). In doing so, Malaysia became the second ASEAN member to ratify this Protocol. In 2023, the Ministry of Human Resources published guidelines on the eleven indicators of forced labour. This was an adaptation of the eleven indicators of forced labour issued by ILO.

Expatriates

Expatriates are classified as white-collar workers. Malaysia remains committed to facilitating business operations and attracting top talent as apparent from the recent introduction and implementation of the following:

Xpats Gateway - This is single-window platform introduced by the Malaysia Digital Economy Corporation (“MDEC”) to provide employers a seamless experience to submit and renew expatriate applications electronically.

DE Rantau Nomad Pass - This is a new type of Professional Visit Pass designed for digital nomads which allows qualified foreign digital professionals to work remotely in Malaysia. It is available to digital freelancers, independent contractors and remote workers in various IT and digital domains, such as software engineering, UX/UI design, cloud computing, cybersecurity, blockchain, AI, machine learning, data analytics, digital marketing and digital content creation.

The above initiatives demonstrate Malaysia’s dedication to creating a welcoming environment for skilled professionals and businesses to foster economic growth and innovation.

The recent changes to immigration policy/law in Malaysia and its likely impact are seen below:

Freeze on Hiring of Foreign Workers

The total number of foreign workers in the country will exceed 15% of the total national workforce in year 2024. As such, the Government has implemented a hiring freeze on foreign worker applications.

Tackling Forced Labour

Malaysia has taken various steps including amending the Employment Act 1955, introducing a National Action Plan on Forced Labour, ratifying the Protocol and introducing guidelines on indicators of forced labour. This may have been in response to issues concerning large multinational companies who have found themselves embroiled in allegations concerning forced labour. Malaysia is likely to see conscious step being taken to tackle forced labour including increased raids and inspections by statutory bodies including the Industrial Relations Department, Labour Department, Immigration Department and the Royal Malaysia Police.

Simplifying Entry Procedures

The Visa Liberation Plan was launched on 1 December 2023, with the aim of simplifying entry into Malaysia for business visitors and foreign talent. These incentives are summarised below:

• No Visa Required for Short Visits - Until 31 December 2024, Indian and Chinese nationals can enter Malaysia for up to 30 days for business or tourism purposes without requiring a visa.
• Extended Validity of Short-Term Visit Passes (“SVPs”) - Until 31 December 2026, SVPs for residents or nationals from certain countries requiring a visa will be valid for up to 30 days.
• Umrah Transit Visa - Visitors requiring a visa to transit through Malaysia for Umrah can now obtain an Umrah Transit Visa, allowing a stay of up to seven days.
• Long-Term Social Visit Pass (“LTSVP”) for Graduates - Students from specific countries who have completed their bachelor’s degree or higher in Malaysia can apply for LTSVPs.

Submission of Malaysia Digital Arrival Card (MDAC)

Effective 1 January 2024, except for a certain category of individuals, all foreign nationals are required to submit an online MDAC application as early as three days prior to arriving in Malaysia.

The options for sponsor-based employment visas are seen below:

Employment Pass (EP)

Expatriates are required to hold a valid EP to work in Malaysia. Applications for EPs must be by the hiring company.

There are three categories of EPs:

• Category I (Expatriates):
1. minimum monthly salary: MYR10,000;
2. contract duration: up to five years;
3. dependants: allowed; and
4. renewable: yes.
• Category II (Expatriates):
1. monthly salary: MYR5,000 to MYR9,999;
2. contract duration: up to two years;
3. dependants: allowed; and
4. renewable: yes.
• Category III (Knowledgeable/Skilled Workers):
1. monthly salary: MYR3,000 to MYR4,999;
2. contract duration: up to 12 months;
3. dependants: not allowed; and
4. renewable: yes, but limited to two times.

For EP Category III:

• Companies must obtain prior approval from the Ministry of Home Affairs to waive the MYR5,000 minimum salary requirement before submitting applications for this category.
• EP Category III holders whose pass have been renewed twice or three years in a row are required to leave the country and serve a three-month cooling off period in order to re-apply for an EP under Category III. Exemptions are only granted if the EP Category III is converted to an EP Category I/II.
• EP Category III holders who are changing employers must leave the country and serve a three-month cooling off period in order to apply for the same EP with a different employer.

Other information on EPs:

• The hiring company must be registered with the Malaysian Expatriate Services Division (“ESD”).
• Applications for EPs are usually processed within five working days subject to submission of all required supporting documents.
• An Approval Letter is required before one can enter Malaysia for employment.
• Applicants are required to apply for and collect a Single-Entry Visa at respective Malaysian Embassies worldwide or online.
• Expatriates will have 30 days from their entry date into Malaysia to endorse the EP sticker.

For Expatriates/Knowledgeable/Skilled Workers, the minimum requirements are:

• degree and above, with at least three years of experience in the relevant field;
• diploma, with at least five years of experience in the relevant field; or
• Technical Certificate or equivalent, with at least seven years of experience in the relevant field.

For Shareholders/Directors, the minimum requirements are:

• shareholder(s) must have a minimum 30% equity in the company; and
• must be a registered director of the company with the Malaysian Companies Commission of Malaysia (ie, the body regulating corporate and business affairs in Malaysia) and/or hold a key position in the company.

Companies that are regulated by specific agencies (for example, the manufacturing, financial services, securities and derivatives markets) are required to submit an approval letter for each EP (Category I, II and III) application from relevant Agencies. EP (Category I, II, and III) applications from companies outside specific sectors will be evaluated by the Expatriate Committee.

Effective 1 January, 2021, employers seeking to hire expatriates must advertise job vacancies for at least 30 days on the MYFutureJobs portal. Employers are also required to interview Malaysian candidates and submit a “Hiring Outcome Report” to the Malaysian Social Security Organisation, detailing the interview results and reasons for rejecting any Malaysian applicants.

Professional Visit Pass (PVP)

A PVP is granted to foreign talents to enter Malaysia to provide services or undergo practical training with a Malaysian company on behalf of an overseas company on a temporary basis, for up to 12 months.

Features of the PVP are as follows:

• It allows holders to be engaged in temporary employment or contracted activities.
• The maximum contract duration is 12 months, one project at a time with no extensions beyond this period. Should companies wish to request PVP extensions (within 12 months) with the same company, the application must be submitted at least one month before the pass expiry date and the applicant is not required to exit the country throughout the application processing period.
• It is applicable to non-salaried positions.
• The application, payment and endorsement process is done online.
• Processing time: five working days.

Eligibility:

• The hiring company must be registered with the ESD.
• Applicable to following categories:
1. Expertise Transfer
2. Research
3. Training at ESD-registered companies
4. Volunteers
5. Exhibitors regulated by the Malaysia Convention & Exhibition Bureau
6. Student Internships under foreign embassies, ESD-registered companies and hotels (four stars and above, or three stars for Indonesian trainees only).
7. Hotel Trainees:
1. Applicable to four-star and above hotels (three-star hotels for Indonesian trainees only).
2. Maximum of 25 trainees at a time.
3. Duration of up to six months, non-renewable.

Other information on PVP:

• The company applying for the PVP is required to comply with the paid-up capital requirement for company registration with ESD.
• An Approval Letter and a Single Entry Visa is required by the applicant before entering Malaysia for the purpose of employment. Upon entering Malaysia, the applicant is required to endorse a PVP sticker within 14 days of entry.
• Any change of employer requires the need for the employee to exit Malaysia and reapply for a new PVP.

Temporary Visit Pass/Visitor’s Pass (Temporary Employment) (“TVP”)

TVP caters for semi-skilled or unskilled workers in specific approved sectors.

There are two types of TVPs issued for foreign workers and foreign domestic employees, ie, foreign maids.

This is only applicable to citizens from the following approved countries:

• Bangladesh
• Cambodia
• India (not allowed to work in manufacturing sector, only allowed for the service sector (sub-sectors of Indian community business, laundry/cleaning, and cargo) agriculture farming, manufacturing and construction)
• Indonesia (male workers are not allowed to work in the manufacturing sector)
• Kazakhstan
• Laos
• Myanmar
• Nepal
• Pakistan
• Philippines (female workers are not allowed to apply for any sector and can only work as a domestic employee)
• Sri Lanka
• Thailand
• Turkmenistan
• Uzbekistan
• Vietnam

Information relating to TVPs for Foreign Workers:

• The only sectors approved are manufacturing, plantation, agriculture, construction and services.
• Applications are subjected to quotas approval from One Stop Centre and Ministry of Human Resources.
• Applicable to workers aged between 18 to 45 years at the time of application.
• Foreign workers are allowed to work for up to 12 months per TVP and any extensions must be done three months before the expiry date. Foreign workers are allowed to work in Malaysia every year for up to ten years.
• Employers must ensure that foreign workers leave the country upon pass expiry, revocation or employment termination
• Foreign workers must be certified healthy by a health examination centre in their source country.
• Foreign workers must undergo a medical examination by an approved medical centre and cleared as healthy and fit to work.
• An Immigration Security Clearance (“ISC”) from an ISC centre in the foreign workers’ source country is required.
• No dependents are allowed.
• Foreign workers cannot change jobs or employers without the permission of the Ministry of Home Affairs.
• Foreign workers are prohibited from marrying local residents or other migrant workers.

Information relating to TVPs for Foreign Domestic Employees:

• The employee must be female and aged between 21 and 45.
• The employee must be certified fit by an appointed medical centre.
• The employee must enter Malaysia with a Visa With Reference from the Malaysian representative office in her home country.

Permission To Work For Foreign Professionals With Social Visit Pass (“PLS@XPATS”)

Effective 3 October 2022, foreign professionals are allowed to apply for a Permission to Work with a 30-day Social Visit Pass, ie, PLS@XPATS from their arrival date in Malaysia. This facility is intended for critical work in the government, government linked companies and the private sector.

Information relating to PLS@XPATS:

• The maximum period for the performance of the worker’s short-term assignment will be 30 days.
• The sponsoring company must be registered in any of the following sectors:
1. education;
2. information, technology and communications;
3. commodity;
4. security and defence;
5. health and medical;
6. finance and banking;
7. agriculture and farming;
8. tourism;
9. factory, manufacturing and construction;
10. consulting/business services;
11. wholesale and retail; and
12. oil, gas and energy.
• The worker must be outside of Malaysia when the application for the PLS@XPATS is submitted.
• Workers who require a visa to enter Malaysia must have secured an entry visa prior to arrival.
• The expected processing time for the PLS@XPATS is three working days from the date of submission, and once approved, the PLS@XPATS will be granted for 30 days upon arrival in Malaysia.
• No extensions will be granted. As such, the work assignment cannot exceed 30 days.

The primary visas relating to unsponsored work are as follows:

Residence Pass-Talent (“RP-T”):

RP-T is a ten-year renewable visa for highly skilled expatriates with the aim to attract and retain talent to bolster Malaysia’s economic growth. Unlike EPs, the RP-T is not tied to an employer.

Eligibility:

• Work experience - The expatriate must have at least three consecutive years of work in Malaysia and must have a total work experience of at least five years.
• EP - The expatriate must hold a valid EP with more than three months’ validity at the time of application.
• Income - Minimum monthly salary of MYR15,000 (excluding allowances/bonuses).
• Tax compliance - The expatriate must possess Malaysian income tax file number with income tax being paid for the past two years which commensurate with minimum monthly income of at least RM180,000.
• Education level - PhD, Master’s, Bachelor’s Degree, Diploma or a professional certificate from a recognised institution.

Its benefits are:

• Long-term stay - live and work in West Malaysia for up to ten years.
• Employment flexibility - change employers without renewing the pass.
• Dependent passes - spouses and children under the age of 18 are eligible for RP-T dependent passes.
• Extended family - dependents over the age of 18, parents, and parents-in-law are eligible for a renewable one-year Social Visit Pass for up to five years.
• Spousal employment - spouses can work without requiring an EP.
• Education - spouses and children under the age of 18 can study in Malaysia (primary/secondary education only).

DE Rantau Nomad Pass

This is a Professional Visit Pass designed for digital nomads which enables qualified foreign digital professionals to travel and work remotely in Malaysia.

This pass is available to digital freelancers, independent contractors and remote workers in various IT and digital domains, such as software engineering, UX/UI design, cloud computing, cybersecurity, blockchain, AI, machine learning, data analytics, digital marketing and digital content creation.

Successful applicants will be provided with a PVP which is valid for three to twelve months of stay, with the option of renewal for an additional twelve months.

Applicants are able to bring in their spouse and children and are not required to be in Malaysia to apply for the pass.

The primary visas relating to investment are as follows:

Malaysia My Second Home (“MM2H”)

MM2H was introduced to allow non-Malaysians to retire and live in Malaysia for an extended period of time to, among others, seek investment opportunities.

Eligibility:

• Age must be 25 and above.
• Requirement for a compulsory stay of 90 cumulative days per year for applicant or dependant (if aged between 25 to 49).
• Requires submission of valid medical report and procuring of medical insurance for each person.
• There are three categories under the MM2H programme:
1. Silver - Minimum fixed deposit required: USD150,000. Term: five years, renewable.
2. Gold - Minimum fixed deposit required: USD500,000. Term: 15 years, renewable.
3. Platinum - Minimum fixed deposit required: USD1,000,000. Term: Eligible to apply for permanent residency.

MM2H applicants under the categories of Silver and Gold are not eligible to work or invest in a business in Malaysia unless valid passes are obtained. A valid EP is required to carry out employment. However, applicants under the Platinum category are allowed to do so without applying for any extra passes.

Malaysia Tech Entrepreneur Programme (“MTEP”)

MTEP is a specially designed pass to attract tech startup and experienced tech entrepreneurs along with investors to work or invest in tech industries in Malaysia to  boost targeted sectors and technology, eg, Agritech, Fintech, Artificial Intelligence and Blockchain.

There is a one-year pass for New Entrepreneurs and a five-year pass for Established Entrepreneurs or Investors along with dependents, as seen below:

New entrepreneur

• Applicable to founders or co-founders with identified tech business ideas with no track record of established business.
• A recognised sponsoring organisation by MDEC is required as a sponsor whereby a personal bond document is signed.
• Successful applicants are granted a PVP with 1-year validity, renewable upon first-year achievement.
• There is requirement for the applicant’s business to be located at any Malaysia Digital Hubs or MDEC’s recognised partner.

Experienced/established entrepreneur

• Applicable to founders or co-founders with identified tech business ideas with more than a two years track record of established business.
• Successful applicants are granted a Residence Pass with five years' validity, which is renewable.
• Applicants are eligible to bring dependents.
• A Malaysian individual above the age of 21 years old is required as a sponsor who shall sign a Declaration Form.
• The applicant is allowed to setup business anywhere in Malaysia.

Venture capital

• Applicable to founders, co-founders or Malaysian venture partners.
• There is a requirement to have a minimum of MYR10 million in funds and register with the Securities Commission Malaysia as a Venture Capital Management Corporation.
• Successful applicants are granted a Residence Pass with five years' validity, which is renewable.
• Applicants are eligible to bring dependants.
• A Malaysian individual above the age of 21 years old is required as a sponsor who shall sign a Declaration Form.

All applications are to be accompanied by the submission of the following:

• A business pitch deck comprising of: (i) proposed business ideas; (ii) market opportunities; and (iii) plans  for securing funding.
• Three months of personal bank statements with a minimum of MYR50,000 capital not limited to Malaysian banks.
• A Certificate of Good Conduct from the embassy or enforcement agency indicating no criminal record in the applicant’s residing country.

Subject to the submission of the MDAC (see 1.2 Upcoming Policy Changes), a Short-Term Social Visit Pass will be issued upon the arrival of foreign visitors. The issuance of this pass is limited to the following purposes:

• Social visit.
• Visiting relatives.
• Tourism.
• Journalism/Reporting.
• Meeting/Conference.
• Business Discussion.
• Factory Inspection.
• Auditing Company Accounts.
• Signing Agreement.
• Carrying out a survey on investment opportunities/setting up factory.
• Attending seminars.
• Students on goodwill missions or taking examinations at a university.
• Taking part in sports competitions.
• Other activities approved by the Director General of Immigration.

There are restrictions as to what a foreign visitor can do in Malaysia, as seen from the limitations for a holder of the Short-Term Social Visit Pass. This is in light of concerns surrounding immigration and infringement of taxation laws by foreign visitors entering Malaysia. Remote working from Malaysia however is now made possible with the introduction of the DE Rantau Nomad Pass (see 1.1 Immigration Policy and 2.2 Unsponsored Work and Investment Visas).

There are no pre-requisite language requirements to obtain a visa in Malaysia. However, it is a requirement for all supporting documents in support of the visa application to be in English or accompanied by an English translated version of the same; for example, educational certificates, marriage/birth certificates and medical reports.

The only requirement for a medical certificate in Malaysia for the purposes of obtaining a visa relates to:

Temporary Visit Pass/Visitor’s Pass (Temporary Employment) (TVP)

TVP are only applicable to foreign workers (blue collar) and foreign domestic employees (see 2.1 Sponsor-Based Employment Visas).

• Applicants are required to undergo a medical examination and be certified fit by the clinic/medical centre registered with FOMEMA, an agency appointed by the Government of Malaysia to assist the Ministry of Health to obtain a clean bill of health.
• Applicants are also required to produce a medical report from the applicant’s country of origin approved by the Ministry of Health Malaysia.
• The TVP will only be issued once the foreign worker is certified fit, failing which, the foreign worker will not be allowed to carry out work in Malaysia and will need to be repatriated.

Malaysia My Second Home (MM2H)

MM2H was introduced by the Malaysian government as a way for non-Malaysians to retire and live in Malaysia for an extended period of time to, among others, seek investment opportunities. Applicants and their dependants are required to submit a medical report from any private hospital or registered clinic in Malaysia.

See 2.1 Sponsor-Based Employment Visas.

Foreign workers and expatriates are only allowed to work for the named employer on the EP or TV. For expatriates, any change in employer must be informed to the ESD and a new EP will need be applied for. For foreign workers (blue-collar workers), any change in employer must be notified to the Ministry of Human Resources and the Labour Department.

The above requirements however do not apply to RP-T as it is not tied to the holder’s employer (see 2.2 Unsponsored Work and Investment Visas) which affords holders the flexibility to change employers without the need for renewal.

The estimated visa processing times upon submission of all required documents are seen below:

• EP: five working days.
• PVP: 14 to 21 working days.
• PLS@XPATS: 14 to 21 working days.
• RP-T: When applying for RP-T, there are two stages which an applicant has to undergo, ie, the submission and endorsement stages. There is also a requirement for applicants to shorten their current employment pass to a maximum of thirty days. The processing time is usually 14 days from the submission of complete documents during the endorsement stage.
• DE Rentau Nomad Pass: six to eight weeks.
• Malaysia Tech Entrepreneur Programme: four weeks.

Unless the applicant is from an origin country which is exempted from entering Malaysia without a visa, applicants are not allowed to enter Malaysia without a Single-Entry Visa.

Once the application for the appropriate pass is accepted and approved, the applicant will be issued with a Visa With Reference letter and an approval letter. Applicants are required to submit these documents at the Malaysian representative office/embassy in their origin country. This will allow the applicant to apply for a Single-Entry Visa to enter Malaysia.

Applicants who plan to leave and re-enter Malaysia while holding these passes are required to apply for a multiple entry visa at the Immigration Office at the same time.

There are no specified options to fast-track the visa application procedure in Malaysia. The Malaysian government had taken recent steps to speed up the expatriate visa application process, cutting it from three months to five days. This action is intended to overcome difficulties that investors confront when entering the nation. Applicants will be separated into two groups: those with a solid track record of compliance and those who have been vetted by appropriate departments. If eligible, both groups will participate in the expedited process.

Upon arrival in Malaysia, expatriates are required to submit their passports to the Malaysian Immigration Department of the Ministry of Home Affairs for endorsement.

With regard to foreign workers and foreign domestic employees employed under TVP, they will only be granted the TVP if they successfully complete the FOMEMA medical examination within 30 days upon their arrival and are deemed fit by a clinic or medical facility that is registered with FOMEMA.

EP: MYR800 plus MYR200 (EP fee per year) plus MYR125 (application processing fee).

PVP: MYR800 plus MYR90 (PVP fee per quarter).

TVP: The following levy payments apply with regard to the following sectors:

• Manufacturing – MYR1,850
• Construction – MYR1,850
• Plantation – MYR640
• Agricultural – MYR640
• Mining and Quarrying – MYR1,850
• Services – MYR1,850

PLS@XPATS: Free of cost.

In Malaysia, there is no prohibition on employees covering the cost of their own employment visas. However, the cost of employment visas are usually covered by the hiring companies.

Immigration offences in Malaysia are covered under the Immigration Act 1963 and Employment Act 1955.

The following are a common list of offences which an individual and/or sponsor can be charged with:

Employers/Sponsors

• Employing foreign workers who are not in possession of a valid employment pass.
• Being indirectly involved in conveying to Malaysia foreign workers not in possession of a valid employment pass.
• Obtaining an employment pass for the foreign workers by making a false statement.
• Providing a false report, false statement or false representation in connection with any obligation imposed by the Immigration Act.
• Harbouring an illegal immigrant.
• Allowing an illegal immigrant to enter or stay on the premises of the employer where he has direct interest and control as a supervisor or manager.
• Failing to seek the approval of and/or notify the Director General of Labour of the employment of foreign workers.

Individuals

• Entering into Malaysia without a genuine passport, travel document, entry permit upon request and/or such documents not having a valid endorsement/pass is deemed as an illegal entry.
• Overstaying in Malaysia after the expiration or cancellation date of the visa/pass.
• Making, forging or altering an endorsement or document to be used as a visa/pass.

Punishment for the above immigration offences carries are severe, and include: (i) imprisonment; (ii) fines; and (iii) whipping/stroke. If offences are committed by a body corporate, any person who at the time of the commission of the offence was a member, of the board of director, a manager, a secretary or a person holding an office or a position similar to that of a manager or secretary of the body corporate shall be guilty of that offence and shall be liable to the same punishment to which the body corporate is liable.

Only approved companies who are registered with the ESD are allowed to apply for the expatriate passes.

With regard to foreign workers (blue collar), employers are subject to the following obligations:

• With regard to foreign domestic employees (foreign maids), employers are required to inform the Director General of Labour within thirty days of employment.
• With regard to foreign employees, the approval of the Director General of Labour is required before employing them. 
• Upon completion or termination of employment, the employers must ensure that the foreign workers are repatriated to their origin countries.

Non-compliance is an offence under the Employment Act 1955 and Immigration Act 1963 and such offences carries punishment including imprisonment and fines.

Employers must ensure that all foreign workers possess a valid employment pass to work in Malaysia, failing which such employers will be deemed to be committing offences under the Immigration Act 1963.

The following relationships are recognised:

• legal spouse (husband/wife);
• children under 18 years of age; and
• legally adopted children under 18 years of age.

A dependant visa holder is limited to using their visa exclusively for educational or study purposes. A dependant visa holder is strictly forbidden to work in any capacity without a valid employment pass.