Malaysia is one of the lowest tax collectors in Southeast Asia. Its strategic location opens up abundant growth opportunities for businesses with access to the highly populated ASEAN markets. Currently, it ranks 12th in the World Bank’s Ease of Doing Business list, which includes 190 countries. While setting up a business in Malaysia is relatively simple, there are some hoops to jump through to hire and relocate foreign nationals to the country.
Navigating Visa Regulations of Malaysia
Employers must obtain approval from Malaysia’s Director General of Labour, specifying the following:
- Job roles you will be hiring for.
- Number of open positions.
- Total number of existing employees.
- Registration number from Companies Commission of Malaysia.
- Business sector.
- Whether the business is active or inactive at the time of seeking approval.
The application requires you to answer further questions regarding your company’s payroll policies, any history of penalties for non-compliance, and criminal (absence of) records.
Types of Visas Offered by the Malaysian Government
There are five types of work permits in Malaysia:
1. Employment Pass
This is given to employees who have secured an employment contract with a registered entity in Malaysia. The employer is liable to apply on behalf of the employee under one of the following categories:
Category I: This is for employees receiving a basic monthly salary of RM 10,000 ($2,250.73) or a contract of up to 60 months.
Category II: This is for those employees on a salary between RM 5,000 ($1,125.40) and RM 10,000 ($2,250.73). It is valid for 23 months and can be renewed.
Category III: Employees hired for a contract period of less than 12 months with salaries between RM 2,000 ($450) and RM 5,000 ($1,125.40) are eligible under this category. A Category III pass may only be renewed up to 10 times.
Individuals in Categories I and II can bring domestic help or dependents, however, those in Category III are not allowed to.
2. Temporary Employment Pass
Also known as a Visitor’s Pass, this can be applied for by an employer with an urgent need for semi-skilled workers. It is valid for 12 months and can be extended for 12 months at a time, for up to 10 years.
You can only apply for this pass for workers in construction, plantation, agriculture, manufacturing and services industries, or domestic helpers. This pass is available only to nationals of select countries, with some of them having specific further restrictions on the types of skills that can be imported.
3. Professional Visit pass
This is also a 12-month visa, granted to professionals who provide their services to Malaysian companies. They possess specific skills and are employees of a foreign company. Professional Visit pass holders are not allowed to apply for a dependent, however, they can apply for domestic help.
4. Digital Nomad Visa
Malaysia is the first ASEAN country to have launched a digital nomad visa. Keeping in mind the gig economy and anytime-anywhere work culture, this has been launched in two categories:
- Digital freelancers or contract workers.
- Remote workers (full-time/part-time).
Individuals who work in the fields of software development, cloud computing, UX, UI, cybersecurity, AI, digital marketing and digital creative content can apply for this visa. Digital nomads are required to submit proof of work and income of at least RM 1,06,632 ($24,000) with the application.
5. PLS@XPATS Pass
This is a 30-day pass given to those who need to enter Malaysia for urgent or critical work in select sectors. These include the government sector, security and defence, healthcare, energy, IT or IT infrastructure, tourism, education, etc. Only registered Malaysian employers can apply for a social visit pass, along with a detailed work schedule.
It is important to note that the Malaysian government does not have any provisions for a Business Visa. Business owners can apply for a Tourist Visa to complete their business-related activities.
Visa Processing Time
The Immigration Department processes most visa applications within 3 business days. However, the processing time for a Professional Visit Pass application can be lengthy, ranging from 75 to 135 business days.
How Access Financial Can Help
Regional variations make managing employment and payroll systems complex for business owners. For employees, understanding their rights and responsibilities is critical to protecting their rights and avoiding penalties. Access Financial provides a full suite of services to employers, recruitment agencies, and contractors to ensure that they meet all local and national obligations. Our EOR and Employed solutions support immigration and talent management while fully complying with the labour laws of the country. We also provide tax mitigation services while adhering strictly to corporate and labour regulations.
Please speak to our team today!
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