Malaysia Revised Immigration Policy to Find Work, Visa Renewals, and Internships

Malaysia has introduced a major overhaul to its immigration policies, fundamentally reshaping how expatriates are hired and retained in the country. These new regulations, introduced by the Immigration Department of Malaysia and the Ministry of Human Resources, impose stricter requirements on hiring foreign workers, renewing employment passes, and ensuring that expatriate employment contributes to local talent development.

With companies now facing mandatory pre-approval processes, longer processing times for employment pass renewals, and new internship obligations tied to expatriate hiring, the changes are set to significantly impact businesses and individuals seeking work opportunities in Malaysia.

As the country moves to tighten control over its foreign workforce, employers and expatriates must navigate a more complex system that demands strategic planning and strict compliance to avoid disruptions. So, if you need details on these critical changes and their implications, read on for the full news story here.

What’s Changing? – 3 Major Things Listed Below!

1# Stricter Rules for Hiring Foreign Workers – Section 60K of Employment Act

Malaysia is tightening its grip on foreign worker employment, requiring mandatory pre-approval before companies can hire expatriates and here’s what’s new:

• • All foreign worker recruitment applications must now go through the ePPAx system (Integrated Foreign Workers Management System).
  • Construction sector employers must meet additional requirements.
  • Employers will now receive approval certificates via the ePPAx system instead of email.
  • The approval is valid for 12 months.

Why Does This Matter? These changes increase scrutiny on companies hiring expatriates, ensuring they prioritize hiring local talent before considering foreign workers. Without pre-approval from Malaysia’s Labour Department (JTKSM), Employment Pass applications will be rejected.

2# Stricter Rules for Employment Pass Renewals and Category Changes

In a sudden announcement by the Malaysia Digital Economy Corporation (MDEC), foreign employees who wish to change their Employment Pass category (e.g., upgrading from Category 3 to Category 2) will now face new hurdles:

• • Companies must submit a ‘Change of Pass Category’ letter when renewing Employment Passes.
  • The current pass must be canceled first, and then a new application must be submitted.
  • A 30-day transition period will be provided, during which the new application must be completed.
  • Effective Date: January 1, 2025.

Why Does This Matter? This new requirement means longer processing times for expatriate work visas. Employers are advised to start the renewal process at least three months before expiry to avoid complications and employment gaps.

3# The 1:3 Internship Policy – Balancing Expat Hiring with Local Talent

Malaysia is revolutionizing its expatriate hiring process by enforcing the 1:3 Internship Policy, also known as the Progressive Policy on Expatriate Contribution to Local Talent Development. Under this rule:

• • For every one expatriate hired, companies must offer three internship positions to local Malaysian students.
  • Companies will be required to allocate internship placements capped at 2% of their total workforce.
  • The pilot phase begins February 15, 2025, to December 31, 2025, for Tier 1 and Tier 2 companies (multinational firms, government-linked companies, and conglomerates).
  • Full enforcement begins January 1, 2026.

Why Does This Matter? Malaysia aims to balance expatriate hiring with local workforce development, ensuring that while foreign professionals contribute to the economy, they also help nurture local talent. Although non-compliance won’t attract penalties, companies that follow this policy will get preferential consideration for Employment Pass approvals.

References

• https://esd.imi.gov.my/portal/latest-news/announcement/announcement-241-approval_hiring_foreign_worker/
• https://mdec.my/expats/announcement
• https://www.talentcorp.com.my/1to3policy/.

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