Virginia, US
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| Vikram Venkataswamy

The Immigration Impact of Changing Employers in Malaysia

Foreign nationals working in Malaysia are permitted to change employers locally should they receive a new job offer with a different employer in Malaysia. However, prior to commencing work for the new employer, the foreign national’s existing Employment Pass with his/her previous employer must be cancelled and thereafter a new Employment Pass application must be submitted and approved, under the sponsorship of the new employer.
 
Most foreign nationals who are changing jobs prefer to do so without having to leave Malaysia, to avoid disruption to their day-to-day lives, and indeed that of any dependants who reside with them, such as children who are attending school. An in-country change of employer application is possible if the following pre-requisites are met:
 
  • The foreign national is applying for an Employment Pass Category I or II.
  • The foreign national’s current employer is able to provide a ‘release letter’ or ‘No Objection Certificate’, confirming the last date of employment with the current company.
  • The foreign national is able to provide his/her most recent Malaysia tax filing documents.
 
A common issue faced by foreign national employees attempting to change employers is the difficulty in obtaining the ‘release letter’ or ‘No Objection Certificate’ from the existing employer.
 
In the event that the foreign national’s current employer is unable or unwilling to provide a release letter, he or she would be required to obtain a cancellation of his or her existing Employment Pass and, thereafter, depart Malaysia. Once the existing pass is cancelled, the new employer can then submit a new Employment Pass application to the authorities on behalf of the foreign national, under its sponsorship. Once the new Employment Pass application is approved, the foreign national can re-enter Malaysia after obtaining an entry visa from a Malaysian embassy/consulate overseas, should this be required.
 
It is important to note that foreign nationals who are required to depart Malaysia following the cancellation of their previous Employment Pass because they could not obtain a release letter should return to their home country rather than simply travelling to another country with the intent of returning to Malaysia shortly thereafter as a visitor. The immigration officers at the airport have full discretion to refuse re-entry to persons under these circumstances and may insist that they only return to Malaysia once their new Employment Pass application is approved.
 
An in-country change is not permissible if a foreign national is converting to an Employment Pass Category III. In such instances, the foreign national must remain outside of Malaysia for a 3 month ‘cooling-off period’ prior to re-entering for work purposes.
 
A Few Key Takeaways
 
An important consideration for foreign nationals who are eligible to complete an in-country change of employer process is that they should not depart Malaysia from the time their existing Employment Pass is cancelled until endorsement of the new Employment Pass in their passport. Doing so would cause disruption to their ability to continue working and residing in Malaysia throughout the change of employer process.
 
It is important to also note that a new Employment Pass would be required if a foreign national is moving laterally within the same group of companies to work for a related company in Malaysia other than the entity that sponsored his/ her existing underlying Employment Pass (e.g. subsidiary or affiliate companies).
 
In my experience, the ‘change of employer’ process can sometimes be more complex than the initial Employment Pass application process. Therefore, I would recommend that foreign workers and their Malaysia sponsors alike should allow sufficient lead time to plan ahead so as to ensure that the process is managed as seamlessly as possible.
 
For more information contact our Malaysia office.