Malaysia

September 2013

This summary is designed to provide basic information about business visit and work authorization requirements and processes for West Malaysia. Hereinafter, for the purposes of simplicity, we will refer to West Malaysia simply as “Malaysia,” but please note that the immigration processes will differ for East Malaysia (Sabah, Sarawak, Labuan).  Please remember that, as with any country, Malaysia’s immigration laws may change without notice. The information in this summary is of a general nature and does not constitute legal advice. For current and detailed information regarding the topics below, as well as documentary requirements, processing times, allowances for accompanying family members, and any other information pertaining to your specific needs, please contact your immigration professional.

BUSINESS VISITORS


Business Visit Defined
– For the purposes hereof, a “business visit” is defined as a short-term trip taken to conduct business activities for which work authorization is not required in the destination country. Once a foreign national requires work authorization, she or he is no longer considered a “business visitor” from an immigration perspective, even though she or he may be making a very short “visit” to a country for what she or he considers to be “business” purposes.

Allowable Activities
– Business visitors in Malaysia must generally limit their activities to the following:

  • Attending business meetings, seminars or conferences
  • Signing agreements
  • Conducting surveys on investment opportunities or setting up factories
  • Inspecting factories

If a business trip, even if very brief, will involve work related activities other than those outlined above, a work permit will be required. Additionally, even when activities are limited to those listed above, if the foreign national will generate profit for the host entity, receive compensation from the host entity and/or take direction from the host entity, a work permit may be required. Accordingly, it should not be assumed from the list above alone that a business visit is or is not sufficient for a given case. Please contact your immigration professional to confirm requirements for your case.

Type of Visa – Certain limited business activities, including the activities listed above, may be conducted on a Social Visit Pass (SVP). Visa waiver nationals are eligible to enter Malaysia without an entry visa and will be issued an SVP on arrival.  Visa nationals must obtain an entry visa, which can be single or multiple entry, at the Malaysian diplomatic post with jurisdiction over their place of residence or country of citizenship.  After entering Malaysia with the entry visa, they will also be granted an SVP. Please contact your immigration professional to determine whether or not you require a visa to enter Malaysia.

Maximum Stay - Depending on the nationality of the business visitor, the maximum allowable stay under an SVP ranges from 14 to 90 days per visit.

Short-Term, Technical Activities – A business visitor’s SVP status is generally not appropriate for visits to install or repair machinery, computer software or equipment, or perform other technical duties at either an affiliated company or a client site. Accordingly, please consult with your immigration professional for advice to determine the most appropriate work pass for your case.

Basic Requirements
– The following general requirements for business visitors are subject to change by the Malaysian authorities.

  1. The applicant must have a residence and an employer outside of Malaysia;
  2. The applicant must be traveling to Malaysia for a limited and pre-set time period and the intended period of stay must be consistent with the purpose of the trip;
  3. The applicant may not receive compensation from sources within Malaysia;
  4. The applicant must provide proof of sufficient funds (such as bank statements, cash or credit cards) for the trip; 
  5. The applicant must have specific, realistic and pre-determined plans for his or her stay in Malaysia; and
  6. The applicant must have a letter from a company in Malaysia inviting the applicant to Malaysia for business purposes, if applicable.

Visa Application: Required Documents and Processing Times – An entry visa application must be made at a Malaysian diplomatic post abroad.  Documentation requirements and processing times for visa applications can change frequently and without notice. In addition, documentation requirements and processing times for visa applications tend to vary across diplomatic posts. Please contact your immigration professional for the most up-to-date information.

EMPLOYMENT AUTHORIZATION

The following is a summary of the requirements and process for obtaining employment authorization for Malaysia for the common scenario of an intracompany transfer. For purposes herein, an "intracompany transfer" shall mean a transfer from a company in a foreign national's home country or another country outside Malaysia to a related company in Malaysia.

Basic Requirements
– In general, a foreign national employee assigned to work in Malaysia must evidence a degree of proprietary knowledge, specialized skills, or managerial/executive-level skills that are not readily available in Malaysia’s domestic labor market. Work authorization is required for the employment of foreign nationals in Malaysia.

Process Overview –  The Malaysian company must sponsor the foreign national employee for either (i) a Professional Visit Pass (PVP), or (ii) an Employment Pass (EP).  For an EP application, the Malaysian company sponsor may be required to have a minimum paid up capital, which can vary from between MYR 250,000 to MYR 500,000 depending on the nationality of its shareholders.  For more information on this, please contact your immigration professional.

PVP holders must remain employed and on the payroll of their home company throughout the PVP assignment. EP holders may be placed on either local or overseas payroll. The Malaysian Immigration Department adjudicates EP applications based on the need to fill the proposed position within the sponsoring company, and the applicant’s nationality and qualifications.  Foreign nationals should not commence work until they are physically in possession of their work pass.

Work Authorization Process: Required Documents and Processing Times – Documentation requirements and processing times for both visa and work authorization applications can change frequently and without notice. Please contact your immigration professional for the most up-to-date information.

Work Pass and Visa Validity Period
– An Employment Pass may be issued for up to five years in accordance with the employment contract. Extensions are possible at the discretion of the immigration authorities. A PVP is applicable for professional, technical or specialist assignments conducted on behalf of an overseas employer and can be valid for up to twelve months. Extension of a PVP beyond twelve months is not allowed and, under current policy, an individual who has already held a PVP for a twelve-month period must observe at least a three-month “cooling off” period before they may apply for a new PVP.

“Regularization” from Visitor to Worker Status –  Generally, Professional Visit Pass applicants must remain outside Malaysia until the PVP application has been approved. Employment Pass applicants can enter Malaysia after the authorities have approved the position they are proposed for and convert from visitor to worker status, subject to exception.

PENALTIES FOR NON-COMPLIANCE


Employer
– The employment of foreign nationals without valid work authorization will result in a fine of MYR 10,000 to MYR 50,000 and/or imprisonment for up to one year for each violation. If more than five unauthorized persons are employed at one time, the employer will be liable to a term of imprisonment of six months to five years and whipping of not more than six strokes. Where the employer is a company, any person who at the time of the commission of the offence was a member of the board of directors, a manager, a secretary or a person holding an office or position similar to that of a manager or secretary of the company shall be guilty of the offence and will be liable to the same punishment faced by the company.

Employers may also be liable to pay for all costs and expenses associated with deporting the foreign nationals and any government costs incurred in detaining the foreign nationals pending deportation. Additional penalties may be applied if an employer makes a false declaration regarding an employee.

Employee

  • Persons who enter and stay in Malaysia without a valid pass or permit are liable to a fine not exceeding MYR 10,000 and/or imprisonment for up to five years, and to whipping of not more than six strokes.
  • Remaining in Malaysia after the expiration of a pass will result in a fine of not less than MYR 10,000 and/or imprisonment for up to five years. 
  • Violation of or failure to comply with the conditions of a pass or permit will result in a fine not exceeding MYR 1,000 and/or imprisonment for up to six months.

In any of the above instances, the employee may be ordered to be removed from Malaysia and pending removal, be detained in custody for such period as may be necessary for the purpose of making arrangements for his or her removal.