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Malaysia – Changes to Employment Pass for Expatriates

MY – Changes to Employment Pass for Expatriates

Malaysia’s immigration authorities announced that effective January 1, 2021, companies intending to employ expatriate employees are first required to advertise the job vacancy for at least 30 days in the MYFutureJobs portal, and fulfill several other requirements before a company may get approval to hire expatriates under the Employment Pass.

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Partner, Global Mobility Services

KPMG in Malaysia

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The Immigration Department of Malaysia announced that effective 1 January 2021, companies intending to employ expatriate employees are first required to advertise the job vacancy for at least 30 days in the MYFutureJobs portal.1 The new policy imposes several other requirements before a company may get approval to hire expatriates under the Employment Pass (EP).2

WHY THIS MATTERS

This new requirement would significantly delay the procurement of EPs. Employers can expect prolonged processing times by the Immigration Department of Malaysia due to the various movement control orders imposed in Malaysia since the middle of March 20203, as well as needing more time to fulfill all the other entry requirements before an expatriate employee can start work in Malaysia. 

Companies and global mobility professionals charged with the immigration affairs of their employees and immigration counsels should be aware of this update since such changes could impact their planning, policies, and processes. 

More Details

In addition to placing an advertisement for 30 days, a company is also required to conduct interviews with short-listed local candidates, complete and submit relevant reports to the Social Security Organisation (SOCSO) to obtain clearance from the Expatriates Hiring Committee if local candidates are not suitable, before the company could offer the vacancy to an expatriate. EPs can only be applied for from the Immigration Department of Malaysia after clearance is obtained. Failing to do so may result in not getting approval to employ an expatriate employee.

Companies may also advertise in different platforms.4 However, the advertisement in the MYFutureJobs portal is mandatory with some automatic exemptions available for the following categories:

i.      C-suite and key positions in an organisation;

ii.     Expatriate with monthly basic salary of at least MYR 15,000;

iii.    Expatriate employee working for regional / representative office in Malaysia;

iv.     Investor / shareholder / owner of company;

v.      Internal transfer / secondment arrangement;

vi.     Foreign recruited staff for approved international organisation;

vii.    Athletes / professional sportsman;

viii.   Renewal of EP.

Special exemptions can also be applied for highly-skilled positions. However, approval is at the discretion of the Authority.  This new requirement is intended to prioritise job opportunities for locals and to reduce the unemployment rate.

KPMG NOTE

This new requirement is not applicable for Professional Visit Pass (PVP) application for those entering Malaysia for short duration for training and providing expert services. It is also notable that the Authority has been strict in granting EP to foreign nationals to support the government’s effort to reduce the unemployment rate.

(For a related story on Malaysia immigration developments, see GMS Flash Alert 2019-086, 10 May 2019.)

FOOTNOTES

1  For the 31 December 2020 press release from the Expatriate Services Division, see https://esd.imi.gov.my/portal/latest-news/announcement/myfuturejobs-recommendation-for-expatriates/

2  For advertising FAQs, see https://www.perkeso.gov.my/images/hiring_rehiring/2912202_-_FAQ_ADVERTISEMENT_MYFUTUREJOBS_BIL_2_2020.pdf .     

3  For prior coverage, see GMS Flash Alert 2020-107, 25 March 2020.

4  See MyFuturejobs Recommendation For Foreign Workers And Expatriate Application (perkeso.gov.my).

 

[MYR 1 = EUR 0.203 | MYR 1 = USD 0.247 | MYR 1 = GBP 0.181 | MYR 1 = AUD 0.319 | MYR 1 = CNY 1.599]

* Please note the KPMG International member firm in the United States does not provide immigration or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.

 

The information contained in this newsletter was submitted by the KPMG International member firm in Malaysia.

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© 2021 KPMG Tax Services Sdn Bhd., a company incorporated under the Malaysian Companies Act 1965 and a member of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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