Intro
Immigration statistics show over 50,000 expatriate passes issued between January and May 2023 alone. Expat Insider’s 2022 global index similarly shows Kuala Lumpur as a desirable destination due to affordable cost of living and ease of finding housing.
However, before hiring an expatriate for your business in Malaysia, it’s important to understand the different employment passes available and their conditions.
In this guide, we’ll explain the three types of Malaysian Employment Passes in detail, especially specific positions and requirements that apply. Whatever role you’re looking to fill, this guide will help you identify the right Employment Pass.
Here’s how we’ll break it down:
- We’ll start with requirements businesses in Malaysia must meet to be eligible to hire expatriates.
- We’ll lay out the three categories of Employment Passes in a table for easy comparison.
- We’ll touch on Dependent Passes and Social Visit Passes (enough so you understand what they are).
- We’ll show you how to apply for Employment Passes on your employee’s behalf, OR
- Shameless plug time – we’ll share a link for you to contact us if you need further assistance.
- We’ll include some reference tables of the regulatory bodies and agencies you should know about.
Let’s start!
Key Takeaways:
- Each Employment Pass application costs RM2,000.
- There are three categories of employment passes in Malaysia: Category 1 for key positions, Category 2 for managerial and professional positions, and Category 3 for non-executive skilled positions. Each category has different salary, work contract duration, and renewal policies.
- To be eligible for a Malaysia employment pass, applicants need to meet certain academic qualifications and work experience, as well as job position and salary requirements. However, there are some restricted sectors where expatriates cannot work.
- Applying for a Malaysia employment pass requires submitting an Expatriate Post Application or an Employment Pass Application, along with supporting documents. Processing time varies depending on the type of pass applied for. Once approved, expatriates can arrive in Malaysia with a Visa With Reference, except for citizens of countries exempted from the requirement.
- Check out our full Employment Pass services and let us know if you’d like to engage expert assistance for all your Employment Pass needs.
Eligibility Requirements to Hire Expatriates
If your business meets the following requirements, you are allowed to hire expatriates.
1. Be a registered business
Okay, this one’s a no-brainer, but it’s a guide so we have to cover all the bases.
Your business must be registered with one of the following bodies:
a. The Companies Commission of Malaysia (SSM) under Companies Act 1965; OR
b. The Registry of Societies Malaysia (ROS) under the Organization Act 1966; OR
c. Firms incorporated under specific acts. E.g. Law firms and Accounting firms; OR
d. Organisations supported by Ministries / Government Agencies; OR
e. International organisations certified by the Ministry of Foreign Affairs
2. Minimum paid-up capital
As the percentage of foreign shareholding increases, so do the minimum paid-up capital requirements.
| Type of business | Min Paid-up Capital |
|---|---|
| 100% Local Owned | RM250,000 |
| Joint Venture (minimum 30% foreign equity) | RM350,000 |
| 100% Foreign-Owned | RM500,000 |
| Foreign-owned companies (foreign equity >50%) running a business under a Wholesale, Retail and Trade (WRT) License. | RM1,000,000 |
| Foreign-owned companies (foreign equity >50%) involved in sub sectors on unregulated services. | RM1,000,000 |
If you meet both those requirements, congrats, the global talent pool is at your disposal.
Head over to the Malaysian Immigration’s Expatriate Services Division (ESD) portal and register your company. We won’t list out the necessary supporting documents since the application form will tell you what’s needed. Just be sure to have all the usual paperwork like your SSM Forms and company profile ready.
Eligibility Requirements for Expatriates
Remember: governments will always prioritise hiring citizens, so it’s necessary for foreign talent to meet certain standards that might be harder to source locally:
To qualify as an expatriate or skilled worker in Malaysia, individuals must meet these requirements:
- Degree and above, with at least 3 years’ experience in the relevant field;
- Diploma, with at least 5 years’ experience in the relevant field;
- Technical Certificate or equivalent, with at least 7 years’ experience in the relevant field
To qualify as a shareholder, individuals must:
- have a minimum 30%equityin the company; and
- be an SSM-registered Director / hold a key position in the company
Now let’s take a side by side look at the three types of employment passes.
Overview of Employment Pass Categories
Super important: these passes only allow the expatriate to work in West Malaysia and do not include Sabah and Sarawak.
| Employment Pass Category | Employment Pass (Category I) | Employment Pass (Category II) | Employment Pass (Category III) |
|---|---|---|---|
| Contract Duration | 60 months / 5 years | 24 months / 2 years | Cannot exceed 12 months / 1 year |
| Minimum Monthly Pay | RM10,000 | RM5,000 | RM3,000 |
| Dependent Permissions | Dependant Pass | Identical to Category I | |
| Typical use cases | highly skilled individuals in managerial, technical, or professional positions | skilled individuals in technical / supervisory positions | semi-skilled individuals in positions requiring practical experience / technical skills |
Additional notes on Category III Employment Passes
- companies under unregulated sectors (neither in the purview of any Approving Agencies or Regulatory Bodies) or Regulatory Bodies must obtain approval from Ministry of Home Affairs (MOHA) to seek exemption from the minimum salary requirement of RM5,000
- after renewing two (2) times or 3 years in a row, the holder must leave the country and serve a 3-month cooling off period, unless converting to Category I / II
- if changing employers, the holder must leave the country and serve a 3-month cooling off period to apply for a separate pass under the new employer
- for countries requiring a visa, successful applicants must obtain a Visa with Reference to enter Malaysia (can be applied for together with Employment Pass and visa is valid for 6 months)
Now, let’s take a quick look at Dependent and Social Visit Passes.
Overview of Dependent & Long-term Social Visit Passes
Dependent Pass
A Dependent Pass is for immediate family members that considered true dependents:
- spouses
- children / adopted children under 18 years old
Long-Term Social Visit Pass
For holders of Employment Passes, a Long-Term Social Visit Pass is for immediate family members that cannot be considered true dependents:
- parents
- parents-in-law
- children / adopted children between 18 – 25 years old
Neither Dependent Pass nor Long-Term Social Visit Pass holders are allowed to work without applying for a separate Employment Pass. However, they are welcome to apply for Student Passes to pursue their education here, subject to Malaysia’s Immigration Department approval.
The Application Process
By this time, you should have already registered your company with the ESD.
Here are the steps:
STEP 1 Make sure all documents are ready
STEP 2 Log into the ESD portal
STEP 3 Fill in the required information of expatriates and dependants (if applicable)
STEP 4 Fill the position by selecting through the lists at “Position Setup”.
STEP 5 Upload all documents as required
STEP 6 Submit completed application
STEP 7 Status notification will be sent via system – approved or rejected (usually within 5 days)
STEP 8 If approved, print the approval letter through the system. Applicable Immigration fees will be advised. Visa with Reference (VWR) letter can be collected at MYXpats Centre or ESD Putrajaya, if applicable
STEP 9 Passport endorsement can be done at MYXpats Centre, ESD Putrajaya or any Immigration state office once Immigration fees payment is made.
Let us handle your Employment Pass needs
If your business is at a level where you’re looking at hiring expatriates, you probably have far better uses of your time than compiling documents and dealing with government agencies.
MISHU’s team is experienced in helping companies negotiate with the relevant authorities to obtain exemptions and swift approval of any necessary permissions. We would be happy to sit down with you and understand your needs – check out our complete Malaysia Employment Pass services (including Category 1), and let us know if you’d like help!
List of approving agencies
| Agency | Sector |
|---|---|
| Ministry of Home Affairs | Unregulated sectors & those under bodies |
| Malaysia Investment Development Authority (MIDA) | Manufacturing and related sectors |
| Malaysia Digital Economy Corporation (MDEC) | Information technology sector, specifically companies with Multimedia Super Corridor (MSC) Status |
| Central Bank of Malaysia (BNM) | Financial, insurance, and banking sectors |
| Securities Commission (SC) | Securities and futures market |
| Iskandar Regional Development Authority | Specific companies operating within Iskandar Malaysia |
| East Coast Economic Region Development Council (ECERDC) | Specific operators within East Coast Economic Region |
| Talent Corporation Malaysia Berhad | Specific key employers under ICAEW/ACCA/NKEA sectors |
| Malaysian Global Innovation & Creativity Centre (MaGIC) | Approved programs under its purview |
| Public Service Department Malaysia | Government contractual positions |
| Expatriate Committee (EC) | Sectors other than those mentioned above |
Click here to go back.
List of regulatory bodies
| Regulatory Body | Sector |
|---|---|
| Ministry of Education | Education |
| Ministry of Health (Traditional & Complementary Medicine) | Healthcare |
| Ministry of Tourism and Culture | Tourism |
| Sports | |
| Ministry of Agriculture and Agro-based Industries | Agriculture |
| Malaysian Bioeconomy Development Corporation Sdn Bhd (Bioeconomy) | Biotechnology |
| Department of Civil Aviation, Ministry of Transport | Aviation |
| Department of Mineral and Geoscience, Ministry of Natural Resources and Environment | Mining |
Click here to go back.
FAQs about Employment Passes in Malaysia:
- How to apply for an Employment Pass in Malaysia?
💡To apply for an Employment Pass in Malaysia, you must find an employer in Malaysia who is willing to hire you. Your employer then needs to apply for approval to hire you through the Expatriate Committee or another authorized approval agency. Once approved, your employer can submit the Employment Pass Malaysia application at the Immigration Department of Malaysia. - What is Employment Pass Category 1 in Malaysia?
💡Employment Pass Category 1 in Malaysia refers to key post positions in a company such as executives, CEOs, technical or managing directors, project managers, etc. To be eligible for this category, you need to have a monthly salary of at least RM10,000 and a work contract of up to five years. The EP can be renewed, and you are allowed to hire a Foreign Domestic Helper. - How to renew an Employment Pass in Malaysia?
💡To renew your Employment Pass in Malaysia, your employer needs to submit an application to the Immigration Department of Malaysia at least three months before the expiration date of your current pass. The application process is the same as the initial application process, and you will need to meet the salary and eligibility requirements of your current category. - What is the role of the Expatriate Committee in getting an Employment Pass in Malaysia?
💡The Expatriate Committee is responsible for approving applications for hiring foreign employees in sectors other than those covered by approved agencies like MIDA, MDeC, BNM, BiotechCorp, and SC. If your profession falls under an approved agency, your employer needs to apply for approval through that agency. However, if your profession does not fall under any approved agency, your employer needs to approach the Expatriate Committee to get approval for your employment. - What is a Visa With Reference in Malaysia?
💡A Visa With Reference (VDR) is an entry visa issued by the Malaysian Representative Office abroad to foreign nationals who are travelling for long-term purposes such as work or studying. Most foreign nationals who want to travel to Malaysia for work must apply for a Malaysian Visa With Reference. However, citizens of certain countries like Australia, Canada, and Ireland are exempt from this requirement.
Do your company do EP parking? Thanks.
Hi Samuel,
Thanks for getting in touch. We have forwarded your question to our in house Employment Pass team, and this is their response:
1. If you are seeking assistance with using us as your offical employer, then I’m afraid MISHU is not currently hiring.
2. If you are an employer seeking assistance for your employees, then we may be able to help.
Let us know!
Sincerely,
The MISHU Editorial Team