The World Bank has predicted that the Malaysian economy will grow 4.3% in 2024. The IMF has also confirmed that the resilient economy has elegantly “weathered external headwinds.” The government’s fiscal reform efforts are set to propel Malaysia toward high-quality and durable growth. If you are planning to capitalise on the opportunities in Malaysia, certain challenges need to be addressed first.
Setting Up Business in Malaysia
Malaysia ranks 12th on the World Bank’s Ease of Doing Business tally. It is a popular destination among foreign business owners looking to expand in Asia. Its proximity to Singapore and consumer demand across neighbouring countries add to the opportunities. Malaysia also has several tax treaties that help businesses and individuals avoid double taxation. Certain sectors, such as manufacturing, also receive tax incentives to establish a business. The process of establishing 100% foreign-owned businesses is relatively easy for these sectors. Also, rental costs in the country are quite manageable.
Getting Work in Malaysia
Malaysian companies can hire foreign workers only if they can prove that they are unable to find locals with the desired set of skills. There are certain exceptions to this however, especially for strategic positions in the finance and management domains. To protect the interests of locals, the government takes stringent measures, one of which is the strict quota system. The system restricts the number of visas issued in a particular sector. Hiring contractors is preferred over full-time employment for skill-intensive jobs by native business owners due to the flexibility, lower employee liability, and expertise contractors offer. This intensifies the competition to get a job offer from a reputed employer. However, this also translates into higher income for those who do get through.
Procuring a Work Permit for Malaysia
With the low cost of living, access to world-class healthcare facilities, and plenty of work opportunities, Malaysia is an attractive destination for foreign individuals and contractors. Skilled workers can apply for a Professional Visit Pass (PVIP), an Employment Pass (EP), or a Temporary Employment Pass (TEP). But getting one is not straightforward. You need a sponsor because you cannot register on your own, without exceptional conditions. Your employer is responsible for filing an immigration request with the country’s Immigration Department.
The process for obtaining a visa is intricate and lengthy. This often impacts business and job search opportunities for contractors. The uncertainty due to delays and navigating the bureaucracy can be daunting, especially for expats coming to Malaysia for the first time.
Each time you sign a new contract, you must go through all the paperwork for the new sponsor. Moreover, you must find work and complete the visa formalities with the new sponsor before the previous visa expires.
You Need a Reliable Partner
An Employer of Record (EOR) is a hiring partner that can provide you easy access to the Malaysian job market. Through streamlined visa processing and compliance expertise, they help reduce costs and time that would otherwise be required to move to the country.
EORs offer tax management, visa application, and documentation, and eliminate the need to get a separate visa for every contract signed. Additionally, they are adept at minimising your tax liabilities and helping contractors manage taxation on foreign income for their homeland.
Businesses that collaborate with EORs get to tap into a global talent pool without visa limitations and movement delays. The EOR facilitates onboarding and relocation while reducing the business’ administrative burden. Through advanced payroll systems, EORs can help you maintain compliance with salary, leave, and other employer obligations to prevent penalties. They also help you navigate the tax system to ensure higher take-home income.
Leverage Access Financial’s Years of Expertise
With 21 years of experience as an EOR/Umbrella Company, Access Financial is a trusted partner for businesses and contractors looking to expand into Malaysia.
Our broad range of services includes:
- Contract administration
- Payroll outsourcing
- Work permit or immigration assistance
- Payroll web-portal
- Insurance packages
We help you save time and effort by taking on all the legal and financial responsibilities so you can focus on value-adding activities. Learn more about how our solutions significantly reduce stress and tax liabilities for business owners and contractors in Malaysia.
Call us at +601 66999095 or email [email protected]. You can also directly send us a query and we will be happy to help.