Can I Employ Foreigners in My Company in Malaysia? (2024)

What’s in this article
  • Recruitment terms and conditions to employ foreign workers
  • Types of work permits available in Malaysia
  • Requirements to apply for an Employment Pass
  • Requirements to apply for Temporary Employment Pass
  • Requirements to apply for Professional Visit Pass
  • The timeframe to apply such pass for foreign workers
  • FAQs

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Malaysia allows expatriates from various countries to work and live here. From general workers to highly skilled professional, companies here may employ foreigners to fulfil the positions required, but is subjected to certain requirements with accordance to the Malaysia’s immigration law.

Besides our neighbouring country, Singapore, Malaysia is also seen as a hot spot for job seekers from all around the globe as the country’s economy is growing steadily and is seen as a viable destination to work and live.

Given the multitude of local and foreign owned companies here, there are abundance of employment opportunities in Malaysia which are not only limited to locals, but also for talented and skillful foreigners as well. These job opportunities are prevalent in major urban areas as there are increased demand for highly skilled individuals to fill up the various position in many industries.

The sponsor, employing Company are expected to abide by the rules and regulation posed by the government in order to employ foreign employees. They are to comply with the Malaysian laws in order to attain the proper visas and work permit before they work here.

Recruitment terms and conditions to employ foreign workers

There are several terms and conditions highlighted by the Ministry of Home Affairs – Immigration Department of Malaysia for employers to abide with:

  • The foreign workers are only allowed to work within these sectors:

    • Manufacturing
    • Construction
    • Plantation
    • Agriculture
    • Services
  • Employers must first obtain the quota to hire foreign workers from the Ministry of Home Affairs, One Stop Centre (OSC)

  • Foreign workers must be the age of at least 18 years old above but below 45 years old at the time of the application is made

  • May retrieve the certified PASS for Immigration Security Clearance (ISC) at source country based on this list

  • The foreign workers must be deemed fit and healthy as approved by the medical centre in the source country based on this list

  • The foreign workers must not be one of those listed foreign individuals who are prohibited from entering Malaysia under Section 8 (3) of Immigration Act 1959/1963

Types of work permits available in Malaysia

The Ministry of Home Affairs has issued three (3) types of work permits available for employers to apply for their foreign workers:

  • Employment Pass

  • Temporary employment pass

  • Professional visit pass

In order for the potential foreign workers to start working in Malaysia, their application will be strictly reviewed by the relevant government agencies. The employer is also expected to abide by the rules and regulations imposed by the government by hiring these foreign workers.

Employment Pass

The Employment Pass is normally for foreign workers who are offered a contract with a Malaysian registered Company. It is for foreign expatriates with specific skills commonly used for the technical and managerial positions.

Within the employment pass program, there are three (3) categories:

  • Salary eligible for the pass holder is MYR 10,000 above with a contract of more than 60 months (5 years). They are allowed to bring dependants and is allowed to hire foreign domestic helper – which is subject to approval. This pass is renewable

  • Salary eligible for pass holder is MYR 5,000 and not more than MYR 10,000 with an employment contract of at least 24 months (2 years). This pass is renewable, and they’re allowed to also bring in dependants and hire foreign domestic holder

  • Salary eligible for pass holder is at least MYR 3,000 but not more than MYR 5,000 with an employment contract of at least 12 months (1 years). This pass is only renewable for at least two (2) more times. However, they are not allowed to bring in dependants or hire foreign domestic helper

Temporary Employment Pass

Temporary Employment Pass, also known as the Visitor Pass, is normally for Malaysian registered Companies who are in need of semi-skilled foreign workers in specific sectors. Its validity is up to 12 months (1 years) and the employers can apply for an extension on a yearly basis for up to 10 years.

There are two types of such passes and they are only applicable to selected industries:

  • Sectors allowed – construction, plantation, agriculture, manufacturing, and services

  • Foreign domestic helpers

Professional Visit Pass

This pass is only eligible for those foreign expatriates with necessary qualifications and skills to work in Malaysia on a temporary basis of 12 months (1 years). They are to provide their services in a Malaysian registered Company on behalf of an overseas Company and is not allowed to apply for dependant’s pass.

Business Visas

Malaysia does not practise the issuance of business visas which is common in countries like Singapore, where businessmen can travel back and forth a country without obtaining visas from their home country.

Can I Employ Foreigners in My Company in Malaysia? (1)

ADVISE: Businessmen are advised to apply for a tourist pass when coming to Malaysia for work trips.

Requirements to apply for an Employment Pass

The candidate eligible for this type of pass:

  • Have proper academic qualification suitable for the position offered

  • Have at least three (3) consecutive years of worth relevant work experiences for the position offered

  • Must work in managerial, executive or technical position which requires specific skills

  • Must meet the salary requirements as mentioned earlier

The one responsible to apply for this pass is the employing Company. They are responsible to do so on behalf of the foreign candidate they wish to hire.

1. Company is to apply for an “expatriate post” at one of the following government agencies:

  • Multimedia Development Corporation – for jobs in the technology sector

  • Malaysia Industrial Development Authority – for the manufacturing and services sectors

  • Malaysian Biotechnology Corporation – for jobs in the biotechnology sector

  • Securities Commission – for the securities and futures market sectors

  • Expatriate Committee – for sectors that are not under the above

2. Once approved, then the hiring Company is able to proceed with the Employment Pass application to the Immigration Department of Malaysia. These documents are required:

  • Employment pass application form

  • Passport copy (preferably certified by notary republic)

  • Letter of approval from relevant authority

  • Employment contract (must clearly highlight the position, salary offered, employment duration and job scope)

  • CV and education certificate (preferably certified by notary republic)

  • Employing Company latest profile (business plan and Company profile – can be retrieve from Company Secretary)

Requirements to apply for Temporary Employment Pass

The candidate eligible for this type of pass:

  • Must work in one of the following sectors:

    • Construction
    • Plantation
    • Agriculture
    • Services
    • Manufacturing
  • Must be from the following countries:

    • Bangladesh – only allowed to work in plantation sector through via government agreements
    • Cambodia
    • India – not allowed to work in manufacturing sector
    • Indonesia – Male citizens allowed to only work in manufacturing sectors whilst females are allowed to work in all sectors
    • Kazakhstan
    • Laos
    • Myanmar
    • Nepal
    • Pakistan
    • Philippines – Female citizen are not allowed to work in any sectors
    • Sri Lanka
    • Thailand
    • Turkmenistan
    • Uzbekistan
    • Vietnam
  • Must be at least 18 years old but below 45 years old during the application time

  • Is deemed fit and healthy to work by the approved medical centre

  • Employer has obtained foreign worker quota from the Ministry of Home Affairs

  • Have undergone Immigration Security Clearance (ISC) verification

Once all the eligibility is checked, then the employing Company may proceed to put in the application:

  • Must apply visa approval letter from Immigration Department of Malaysia
  • Must submit VDR application form (using the e-service in Immigration Department official website)
  • Letter of quota approval from Ministry of Home Affairs
  • 12 and IM.38 visa application form (can be found in the official website as well)
  • Receipt of payment for levy
  • Security bond – insurance guarantees/bank guarantee
  • Passport copy (preferably certified by notary republic)
  • Passport sized photo of applicant
  • Medical certificate issued by the approved health centre from applicant home country (valid for 3 months)
  • Foreign Worker Compensation Scheme (insurance)
  • An insurance policy of Health Insurance Protection Scheme Foreign Workers (SPIKPA) (health insurance)

Upon receiving the approval letter, the foreign worker is able to apply the visa with reference (VDR) from Malaysia embassy (if needed). Then, they are to collect the Immigration Security Clearance (ISC) in their home country.

The temporary employment pass will be then issued once the foreign worker has passed the Foreign Worker Medical Examination Monitoring Agency (FOMEMA) medical examination in Malaysia within 30 days of arrival.

Requirements to apply for Professional Visit Pass

The candidate eligible for this type of pass:

  • Foreign artist (filming and performance)

  • Islamic missionary

  • Other religious worker such as Gurukkal, Granthi, Priest etc.

  • International students attending religious courses studies with Malaysia Bible Seminary

  • Government officials traveling for official purpose

  • Jockey expert

  • Volunteer

  • International student under mobility program or industrial training

The employing Company may proceed to put in the application with the following documents:

  • Passport copy (preferably certified by notary republic)

  • 12 and IM.38 visa application form (can be found in the official website)

  • Letter of offer from Malaysian registered Company

  • Employing Company latest profile (business plan and Company profile – can be retrieve from Company Secretary)

  • Academic certificates

  • Letter of approval from Department of Religion and Islamic Religious Department (if required)

  • Bank guarantee (for China citizens)

Similar to the application of the Temporary Employment Pass, the foreign worker is able to apply the visa with reference (VDR) from Malaysia embassy (if needed). Once arrived in Malaysia, the foreign worker is to visit the Immigration Department of Malaysia to receive the professional visit pass sticker on their passport.

The timeframe to apply such passes for foreign workers

There is no specific timeframe given by the Ministry of Home Affairs when it comes to application of work visa for foreign workers. It may take around 6 months to 12 months, depending on the completeness of documents furnished by the employing Company.

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Can I Employ Foreigners in My Company in Malaysia? (2024)

FAQs

Can my company hire a foreigner? ›

Yes, but each employer must file a separate Form I-129 petition and, where applicable, the appropriate Labor Certification, or Labor Condition Application with the DOL, and receive approval from USCIS before the employee can begin to work for a new or an additional employer.

Can we outsource foreign workers in Malaysia? ›

Many Malaysian companies have not directly hired foreign workers since 2005. Instead, recruitment agencies employ foreign workers, outsourcing them to companies. This outsourcing practice was formalised by a 2012 amendment to the Employment Act of 1955.

What is employment policy of foreign workers in Malaysia? ›

Employment pass

This work permit enables foreign workers to take up employment under a contract of service with an organization in Malaysia. This pass is issued to employees with specific skills, usually for technical or managerial jobs.

Can a company hire someone from another country? ›

Yes, a US company can hire someone in another country; however, the process is not as straightforward as hiring employees in the US. Some common challenges US companies face when hiring an international workforce include: Permanent establishment.

How can I hire a foreign employee in Malaysia? ›

Must apply visa approval letter from Immigration Department of Malaysia. Must submit VDR application form (using the e-service in Immigration Department official website) Letter of quota approval from Ministry of Home Affairs.

Is it illegal to recruit employees from another country? ›

Yes, but you will need to ensure that your foreign independent contractor is not legally defined as an employee under foreign labor laws, in order to avoid any litigations. You should also have your foreign independent contractor complete Form W-8 BEN to establish their status as a foreign person.

Do foreign workers pay taxes in Malaysia? ›

Foreigners with a non-resident status are subjected to a flat taxation rate of 28%, this means that the tax percentage will remain the same no matter the amount of income. As a non-resident you're are also not eligible for any tax deductions.

Can I work remotely in Malaysia? ›

Malaysia's new 'digital nomad' scheme is called the DE Rantau Nomad Pass and it's designed to appeal to people who work remotely and can therefore live anywhere. Currently, remote workers from certain countries can work in Malaysia for up to 90 days, but under the new rules you could soon stay for up to two years.

How do I hire a foreign employee remotely? ›

Use a Global Employment Organization (GEO)

An employer of record (EOR) is also known as a third party local entity. This is a term used to describe a separate organization. This group will hire and pay your remote employees on your company's behalf.

Does foreigner need to pay EPF in Malaysia? ›

It is not compulsory for non-Malaysian citizens and non-permanent residents to contribute to the EPF, but they may elect to do so. * Contribution rate is reduced to 9% for the period from 1 January 2021 to 30 June 2022.

How long can foreigners work in Malaysia? ›

The holder will be allowed to stay and work in Malaysia for 10 years (with an option to renew). The holder's spouse and children below 18 years old will also be given the Residence Pass. The spouse will also be able to work in Malaysia. The children under 18 are permitted to study in Malaysia.

How long can foreign workers work in Malaysia? ›

Foreign workers are allowed to work in this country every year for up to 10 years. However, those registered under the 6P Program are allowed to work up to 3 years only.

What is it called when a company hires people from outside the country? ›

Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company's own employees and staff.

Is it legal to work remotely from another country? ›

It is legal to work from many countries throughout the world even if you aren't a resident of that country. However, you'll need to comply with your chosen country's visa and tax requirements in order to stay there legally. A compliance partner can help you sort through these requirements.

How do I employ a foreign worker? ›

You can only employ a foreigner who is in possession of a valid work visa. In the case of a general work visa, however, you must extend a job offer to enable the prospective employee to apply for the visa. Furthermore, the foreign national may only start working once he or she has received their work visa.

Are foreign workers covered under employment act Malaysia? ›

Application of the Labour Laws to Foreigners

Similar to any employees in Malaysia, foreign employees are entitled to all protections provided in the Employment Act 1955.

How can I hire a foreign maid in Malaysia? ›

Applications can be submitted: By the Employer himself. Through employment agencies registered with the Immigration Department of Malaysia at the Immigration office of the State as per employer's address.

Can you employ someone without a work permit? ›

Can you employ someone without a work permit? No, you are not allowed to employ someone without a South African work visa as this is illegal and the company or person can be fined or face imprisonment.

What are the 3 types of illegal recruitment? ›

Illegal recruitment committed by a syndicate; b. Illegal recruitment committed in a large scale. Simple illegal recruitment or illegal recruitment covers any recruitment activity by non-licenses or non-holders of authority.

Can I sponsor a foreign worker? ›

U.S. companies may hire any foreign national as long as they are already in the country and are eligible and authorized to work in the United States. Federal law requires all employees complete an I-9 form for legal identification.

What is an illegal recruitment? ›

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group.

What salary is exempt from tax Malaysia? ›

- RM10,000 for every completed year of service with the same employer / companies in the same group. Dividends paid, credited or distributed by co-operative societies to their members.

What is foreign worker levy in Malaysia? ›

Thus, a foreign worker levy is the imposition of a fine or a tax on an employer for employing imported or foreign workers.

Do foreigners pay payroll taxes? ›

Wages paid to resident aliens employed within the United States by an American or foreign employer are subject to Social Security/Medicare taxes under the same rules that apply to U.S. citizens.

Do you need a visa to work remotely in Malaysia? ›

Malaysia has issued a special work permit specifically for digital nomads called De Rantau. The program aims to attract foreign and local digital professionals to work in the country for between three and 12 months. Applications are open from October 1, 2022.

How do I hire an employee in Malaysia? ›

Steps to hiring in Malaysia
  1. Advertise job positions. Start by writing job descriptions and required qualifications to advertise your job positions in Malaysia. ...
  2. Review applications and narrow down the pool. ...
  3. Interview the most qualified applicants. ...
  4. Send offer letters and employment contracts. ...
  5. Onboard new employees.
15 Mar 2021

Is it legal to work for 2 companies at the same time in Malaysia? ›

While some employers allow their employees to engage in double employment, there are few legislations clearly prohibit this practice. In Malaysia, as to date there is no specific law regulating double employment by employees.

How do I pay an employee in another country? ›

Set Up Local Entities and Use Multi-Country Payroll

Generally, a company must establish an entity in a country if it wishes to hire and pay employees there. A company that has set up an entity in one or more foreign countries can outsource a multi-country payroll provider to pay its international employees.

Do I need a visa for remote work? ›

Without a work visa, your remote workers can visit your office for business meetings. With a work visa, they can spend part of their time working from your office, and the rest of it working from anywhere in the world.

How do I hire and pay for international employees? ›

Let's look at some of the most common methods companies are using for paying foreign employees overseas, the benefits and potential drawbacks for each.
  1. Online payment service providers. ...
  2. Professional Employer Organization (PEO) ...
  3. Partner up with a local business. ...
  4. Set up a local branch.
25 May 2022

Is foreign worker subject to Socso? ›

social security exemption

Foreign workers are exempted from employee's social security contributions administered by SOCSO.

How do socso pay foreign workers? ›

All payments for foreign worker contributions must be made online through the ASSIST Portal or internet banking by using the Foreign Workers Social Security Number (FWSS -12 digits) provided by SOCSO during the registration of foreign workers.

Can employer keep foreign worker passport in Malaysia? ›

Employers should not keep the passports of their migrant workers or migrant domestic workers ( MDWs ). They should also not force their workers to give them their passport. The passport belongs to the bearer and the issuing authority of the bearer's country/region of origin.

Can foreign wife work in Malaysia? ›

The foreign husband/wife is permitted to work in Malaysia without having to change their Social Visit Pass to the Employment Pass on condition that the spouse has acquired work approval from the Immigration Department. 2. The approval is in the form of an endorsement on the passport/travel document.

What sectors are allowed to employ foreign workers? ›

KUALA LUMPUR: Three industries - construction, manufacturing and service - would be allowed to hire foreign workers from all 15 source countries. Both the Home Minister Datuk Seri Hamzah Zainudin and Human Resource Minister Datuk Seri M.

Is Malaysia open for foreign workers 2022? ›

According to the ministry, the demand for foreign worker employment has hit about 1.8mn – the highest number ever received, it noted. In that vein, as of 26 September 2022, the ministry has approved a total of 541,315 quotas for the recruitment of foreign workers.

Can you work in Malaysia with English? ›

As most Malaysians are conversational in English, you won't necessarily need to be proficient in Malay to secure a job.

How much does a work permit cost in Malaysia? ›

Malaysia work visa fees
Type of Malaysia Work PassFees
Malaysia Employment Pass (EP)EP FeeRM 200 per year
EP Processing FeeRM 125
Malaysia Professional Visit Pass (PVP)PVP FeeRM 90 for every quarter RM 360 for one year

What are the effect of foreign workers in Malaysia? ›

Foreign workers are found to contribute positively to GDP, and do not necessarily compete for the same jobs with native workers at the aggregate level. In terms of wages, the presence of foreign workers is found to lower average real wage at the national level, but only marginally.

What are the disadvantages of hiring foreign workers? ›

The cons associated with hiring foreign workers include,
  • Local entity Registration: Hiring international employees could be graded into two types. ...
  • Global Payscale: ...
  • Managing foreign workers and contractors: ...
  • Biased employment opportunities: ...
  • Lack of Communication: ...
  • Lack of commitment and Integrity:

Why companies should hire foreign workers? ›

The advantages of hiring foreign workers

Access to a global talent pool. Hiring foreign workers allows access to an international pool of talent. When coupled with remote work scenarios, companies could engage the best possible workers in their industries by removing geographical restrictions.

Can my employer see where I am working from? ›

Yes, it is possible that your boss (or whomever) is watching you. Using your IP address (a series of numbers with dots), someone can easily trace your location while you're logging in from out of office. But… there are also ways of making this impossible.

Can I work in two countries at the same time? ›

If you have the time and the ability to work remotely, it doesn't make any difference where you are or who you work for. That is to say, there is no law against it.

Where do I pay taxes if I work remotely in another country? ›

If you are a citizen of the United States working remotely from another country, you may need to fill out some forms, but in most cases, you only owe taxes in the country where you live and work. U.S. citizen high earners (above $100,000 per year) may owe U.S. taxes even while working abroad, though.

Can you pay a foreign employee? ›

There are two primary ways to legally pay foreign employees overseas: 1) set up and incorporate a legal entity or 2) use a GEO service with a local employer of record. (Some companies choose to hire foreign workers as contractors, but that strategy is more suited for shorter, project-based roles).

Can a company hire only US citizens? ›

nder federal law, employers generally cannot make hiring, firing, or recruitment or referral decisions based on a worker's citizenship status. This flyer provides information on how to avoid citizenship status discrimination under the Immigration and Nationality Act (INA), 8 U.S.C.

Can Singapore company hire foreigner? ›

Under the Employment Act, a foreigner must have a valid work visa to be able to work in Singapore. If you wish to hire a foreigner, you will have to apply for a valid work pass or work permit on his/her behalf before he/she can commence employment with you.

Can I employ someone from South Africa? ›

You can only employ a foreigner who is in possession of a valid work visa. In the case of a general work visa, however, you must extend a job offer to enable the prospective employee to apply for the visa. Furthermore, the foreign national may only start working once he or she has received their work visa.

Can a UK company employ a foreigner? ›

You'll usually need a sponsor licence to employ someone to work for you from outside the UK. You will not need a licence to sponsor certain groups, for example: Irish citizens. those with settled or pre-settled status under the EU Settlement Scheme.

Can an employer ask nationality? ›

Federal law does not prohibit employers from asking you about your national origin. However, because such questions may indicate a possible intent to discriminate based on national origin, we recommend that employers ensure that they ask about national origin only for a lawful purpose.

Can you refuse to hire a non US citizen? ›

Usually, it is illegal to hire only U.S. citizens. In fact, the Immigration and Nationality Act (INA) forbids employers from requiring U.S. citizenship for employment, unless specifically instructed to by law or federal government contract.

Can you ask an employee their citizenship? ›

Generally, California employers may not ask you about your citizenship status during an interview. After you receive a job offer, though, employers must work to verify your identity and work eligibility.

How much does it cost to hire a foreign worker? ›

According to Shamsuddin, the cost of hiring a foreign labour without middlemen range between RM1,500 (US$365.85) to RM5,000 (US$1,219.51). However, going through an agent will inflate the cost several folds from RM13,000 (US$3,170.73) to RM14,000.

Can Hawker employ foreigners? ›

Can I register a foreigner as my hawker assistant? Answer: Only Singaporeans and Permanent Residents (PRs) are permitted to operate hawker stalls managed by NEA. Stallholders may operate their stalls with the assistance of their spouses, some of whom may be foreigners, subject to NEA's approval.

Can I hire someone with a Work Permit? ›

If the new employer's application is approved: You can continue to employ the worker, as long as the existing Work Permit is valid.

How do I employ someone in Malaysia? ›

Steps to hiring in Malaysia
  1. Advertise job positions. Start by writing job descriptions and required qualifications to advertise your job positions in Malaysia. ...
  2. Review applications and narrow down the pool. ...
  3. Interview the most qualified applicants. ...
  4. Send offer letters and employment contracts. ...
  5. Onboard new employees.
15 Mar 2021

What happens if you employ someone without a work permit? ›

What is the fine for employing illegal workers in South Africa? The employer will be fined anything between R 7000.00 to R 50, 000.00 per illegal worker and as previously mentioned the employer can be arrested for 12 months or more depending on the severity of the case.

How can I hire someone in another country remotely? ›

Foreign workers can be hired via legal entities abroad, through employer of record (EOR) companies, or as independent contractors. Hiring remote workers from abroad has become a common practice among many US companies. Doing this can significantly reduce costs, and companies can select from a wider talent pool.

Is it illegal to work remotely in another country? ›

Can I Work Remotely From Another Country? It is legal to work from many countries throughout the world even if you aren't a resident of that country. However, you'll need to comply with your chosen country's visa and tax requirements in order to stay there legally.

How do remote workers get taxed? ›

Employees who live out of state and work from home

You'll pay unemployment taxes and report their income to the states where they live, not your state. However, some states use “convenience of employer” rules that require you to pay taxes in your state, not the employee's state.

Where do I pay taxes if I work remotely? ›

A permanent remote worker will file their personal income taxes in their state of residence, whether they are a W-2 employee or a 1099-NEC independent contractor.

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