Malaysia’s globalised economy has facilitated growth and development through the years. As an open economy, Malaysia takes national competitiveness seriously in efforts to continue to attract foreign direct investments, sustain domestic investments and maintaining position in the global trading environment.
The Malaysian Government sees private sector as the main driving force of economic growth and development in the country, while the Government itself takes on the role of facilitating business. As such, efforts have been made to continuously improve the Government’s delivery system and to enhance the cost-effectiveness of doing business in Malaysia.
With globalisation, capital, goods, ideas, and people move increasingly freely across a borderless world. As such, although placing great emphasis on the development of the country’s own human capital, the Malaysian government has always welcomed foreign talents, recognising the fact that Malaysian workers would benefit from this interaction. These talents will invariably add value to the work force. It is hoped that the information provided will be a useful reference tool for Malaysian-owned and foreign-owned companies operating in or planning to set up business in this country.
Employment of Expatriates
There are two stages in the employment of expatriates: Application for an expatriate post and an
endorsement of employment pass.
Stage 1: Application for Expatriate Post
This is the stage where a company submits its application for expatriate posts. The Government has appointed the following agencies to evaluate and approve expatriate posts.
- Malaysian Industrial Development Authority (MIDA) for the manufacturing and its related services sectors.
- Multimedia Development Corporation (MDeC) for the information technology sector, specifically companies that have been awarded Multimedia Super Corridor (MSC) Status.
- Central Bank of Malaysia (BNM) for the financial, insurance and banking sectors.
- Securities Commission (SC) for the securities and futures market.
- Public Service Department (PSD) for contract of employment in Public Sector.
- Expatriate Committee (EC) for expatriate posts in sectors other than the above mentioned sectors. The Employment Pass Division of the Immigration Department of Malaysia is the secretariat for EC.
Stage 2: Endorsement of Employment Pass
Upon approval of the expatriate posts by the approving agency, the company must submit an application to the Immigration Department for endorsement of the Employment Pass. The endorsement of related passes can be made at Employment Pass Division, Immigration Department of Malaysia or the nearest State Immigration office. Once the Employment Pass has been endorsed, the expatriate can be hired.
Issuance of employment pass or passes related to expatriate posts is solely under the jurisdiction of the Immigration Department.
Types of Expatriate Posts
Applicants can apply for the following expatriate posts:
1. Key Posts
These are high level (1st level) managerial posts in foreign-owned private companies and firms operating in Malaysia. Key posts are posts essential for companies to safeguard their interests and investments. The expatriates are responsible in determining the company’s policies in achieving its goals and objectives.
Example: Executive Chairman, Chief Executive Officer, Managing Director, General Manager, Technical Director, Production Manager, Project Manager or Factory Manager.
2. Executive Posts
These are intermediate level (2nd level) managerial and professional posts. The posts require academic qualifications, practical experience, skills and expertise related to the respective jobs. The expatriates are responsible for implementing the company’s policies and supervision of staff.
Example: Management functions such as Marketing Manager, Logistics Manager, Investment Manager and Quality Control Manager. Professional such as Chief Engineer, Engineering Manager, Lecturer, Doctor, Architect etc.
3. Non-Executive Posts
These are posts for the performance of technical jobs that require specific technical or practical skills and experience.
Example: Welder, Mould Maker, Mould Designer, Tool & Die Maker, Manufacturing Systems Designer, Food/Nutrient Technologist, Fashion Designer, Specialist in Furniture Design & Ergonomics, Heat Setting Technician, Sewing Specialist, Craftsman/Engraving and Product/Flavouring Specialist.
Minimum Salary & Paid-Up Share Capital Requirements
- Minimum salary of RM5,000.00 per month and at least 2 years’ employment contract.
- Minimum equity structure for qualification of an expatriate position is as follows:-
1. 100% Local Owned (Malaysian) – RM 250,000.00
2. Local & Foreign Joint Ownership – RM 350,000.00
(If WRT License is required, the minimum paid-up share capital is RM 500,000.00)*
3. 100% Foreign Owned – RM 500,000.00
(If WRT License is required, the minimum paid-up share capital is RM1 million)*
* What is WRT and why is it required?
WRT stands for Warehousing, Retail & Distributive Trade. Under the policy on foreign participation in wholesale and retail trade, all proposals for foreign involvement must be granted approval by the Committee on Wholesale and Retail Trade (CWRT). This includes the opening of new branches and relocation.
Objectives of the policy are:
• to ensure a fair and orderly development of the industry, including the interest of local traders;
• to streamline the industry with the national objective of increasing Bumiputera (indigenous people) participation in the economic sector, in line with the National Development Policy; and
• to encourage modernisation and to increase efficiency of the industry and its continued contribution to the growth of the economy.
Important :- Expatriate/Employment Pass (EP) is not guaranteed by amount of investment but by justification of the need for the applicant’s skill.
Stay with us as we bring you more information on Employment of Expatriates, with highlights on rules and regulations governing each and every specific Business Sectors & Industries in Malaysia. Until then, do follow us on Facebook for more news and updates!
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