Application of Employment Pass in Malaysia
Malaysia’s growing economy and tax incentives have attracted many investors to set up a company in Malaysia. To hire foreign talents to work in Malaysia company or organisation in a professional and high-skilled position, the company will need to apply for a Malaysia Employment Pass for the expatriates.
The Employment Pass is a work permit that enables an expatriate to legally work and stay in Malaysia. The pass is subject to the employment contract of up to 60 months. The Expatriate Committee (EC) or relevant authorities must give approval for the foreign talent to fill a position before the issuance of an expatriate Employment Pass can be made by the Immigration Department of Malaysia. As in most countries, the job opportunities must be first offered to local talents before it can be taken up by an expatriate.
- Eligibility Criteria for Applicants
The minimum requirements to apply for an expatriate post are as follows:
(1)
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For Expatriate(s)/ Knowledge/Skilled Worker(s)
(a) Degree and above, with at least three (3) years?experience in the relevant field;
(b) Diploma, with at least 5 years?experience in the relevant field; or
(c) Technical Certificate or equivalent, with at least 7 years?experience in the relevant field.
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(2)
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For Shareholder(s)
(a) Shareholder(s) must have a minimum of 30% equity in the company; and
(b) Must be company director registered with the Companies Commission of Malaysia (CCM) and/or holds a key position in the company.
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In addition to the above requirements, applicants shall also satisfy the corresponding requirements depending on the types of Employment Passes they are applying for:
(1)
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Employment Pass Category I
(a) Applicant must earn a basic monthly salary of at least RM10,000
(b) Applicant must have an employment contract valid up to five (5) years
(c) Spouse and children under 18 years old are eligible for Dependant Pass
(d) Children over 18 years old and unmarried are eligible for Social Visit Pass (Long Term)
(e) Parents/ Parents-in-law are eligible for Social Visit Pass (Long Term)
(f) Eligible to hire foreign maid(s)
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(2)
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Employment Pass Category II
(a) Applicant must earn a basic monthly salary between RM5,000 and RM9,999
(b) Applicant must have an employment contract valid up to two (2) years
(c) Spouse and children under 18 years old are eligible for Dependant Pass
(d) Children over 18 years old and unmarried are eligible for Social Visit Pass (Long Term)
(e) Parents/ Parents-in-law are eligible for Social Visit Pass (Long Term)
(f) Eligible to hire foreign maid(s)
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(3)
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Employment Pass Category III
(a) Applicant must earn a basic monthly salary between RM3,000 and RM4,999
(b) Applicant must have an employment contract with duration not more than twelve (12) months
(c) Not allowed to bring dependants
(d) Not eligible to hire foreign maid
(e) Companies that fall under Regulatory Bodies or unregulated sectors, which are not under the purview of any Approving Agencies are required to apply exemption from minimum salary requirement of RM5,000 from the Ministry of Home Affairs (MOHA)
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- Eligibility Criteria for Employers
Expatriates are not allowed to apply for their own employment passes. The application must be done by the company that intends to hire the expatriate. A company is required to register with Expatriate Services Division (ESD) before it can proceed to submit the expatriate employment pass application online. The company needs to fulfill certain criteria for ESD registration.
Firstly, the company must be registered with either:
(1) The CCM under the Companies Act 2016;
(2) The Registry of Societies Malaysia under the Organisation Act 1966;
(3) Firms incorporated under specific acts. E.g. Law firms and Accounting firms;
(4) Organisations supported by Ministries/ Government Agencies; or
(5) International organisations certified by the Ministry of Foreign Affairs.
Secondly, to check to see if the company meets the minimum paid-up capital requirement outlined below (not applicable to public limited companies, companies limited by guarantee, associations and organisations incorporated under specific acts):
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Equity
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Paid-Up Capital
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100% Local Owned
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RM250,000
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Joint Venture (minimum foreign equity is 30%)
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RM350,000
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100% Foreign Owned
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RM500,000
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Foreign-owned companies (foreign equity at 51% and above) operating in the Wholesale, Retail and Trade (WRT) sectors (mandatory requirement to submit valid WRT License, if applicable); or
Foreign-owned companies (foreign equity at 51% and above) involved in the sub sectors on unregulated services are required to obtain approval from the Ministry of Domestic Trade, Co-operatives, and Consumerism
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RM1,000,000
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- Job Advertisement Requirement
Effective from 1 January 2021, companies seeking to employ expatriates are required to register and advertise certain categories of vacant jobs through the MYFutureJobs online portal. This job advertisement requirement was introduced by the Government of Malaysia as an initiative to provide better employment opportunities to local talents and this is a precondition for application to hire expatriates under an Employment Pass.
With this new requirement, companies in Malaysia that are seeking to employ expatriates under an Employment Pass are required to first advertise job vacancies to local talents through the MYFutureJobs online portal for a minimum of thirty (30) days before the job vacancies can be filled by an expatriate.
Based on the latest guidelines, companies are exempted from the job advertisement requirement provided the positions are included in the list of exemptions stated below:
(1) Important positions (C-Suite and Key Posts) and expatriate(s) with monthly income of RM15,000 and above
(2) Expatriates employed by representative office/ regional office
(3) Investors/ shareholders/ owners
(4) Corporate transfers/ placements/ trade agreements
(5) Foreign Recruited Staff appointed by international organisation
(4) Athletes/professionals to join the sports sectors in the country
- Process of Application
The process of obtaining a Malaysian Employment Pass is divided into two parts:
(1) Application for an expatriate post from the relevant Approving Agencies, as determined by the nature of business of the company.
(2) Upon approval of the expatriate posts by the Approving Agencies, the company must submit the application for the Immigration Department for the endorsement of the Employment Pass.
For the application for the Employment Pass, the following supporting documents must be submitted:
(1) Recent passport photo
(2) Copy of passport (full booklet with cover)
(3) Copy of highest educational certificates (including professional certificate, if applicable)
(4) Latest comprehensive resume
(5) Copy of employment contract (duly stamped by Malaysia Inland Revenue Board)
(6) Supporting document from Approving Agencies/Regulatory Bodies (if applicable)
(7) Detailed job description printed on company’s letterhead
(8) Other documents specified upon request
The application, if approved, will be notified via the system. The approval letter will also be issued and can be printed directly from the system. Visa-required nationals must apply for a Malaysia Visa with Reference (VDR) to be allowed entry to the country. The application for VDR can be made together when submitting the Employment Pass application. The VDR will be issued online and available for download. Otherwise, it can be collected at any Malaysian Embassy or Consulate that issues visas. The VDR issued online has a validity of six (6) months. If the applicant does not enter Malaysia within the six (6) months?period, the VDR will be cancelled and a new application will need to be raised.
Applicants who have entered the country will have thirty (30) days from entry date to endorse the Employment Pass sticker. Payment for the immigration fees can be made at the Malaysia Expatriate Talent Service Centre (MYXpats Centre) counter. Endorsed passport can be collected within three (3) working days.
The whole process of employment pass application will take about three (3) to six (6) months.
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