Virginia, US
More Positive Change With Malaysia’s New Employment Pass Category
| Ramesh Nair

More Positive Change With Malaysia’s New Employment Pass Category

Over the last 18 months or so, the West Malaysian immigration system has undergone a number of significant changes. These include the launch of a mandatory e-filing system, the introduction of a new processing division (MYXpats Centre), and most recently the introduction of a new work permit category, the Employment Pass (Category III).
Although the implementation of several of these changes was challenging initially, they have largely been seen as positive and have resulted in more streamlined and efficient processing of employment-based immigration applications.
The reforms are in line with the Economic Transformation Program (ETP), a Malaysian Government initiative aimed at transforming Malaysia into a high income economy by the year 2020 and seeing it achieve status as a developed nation.
Most of the reforms are geared towards encouraging foreign investment in Malaysia by creating a business-friendly environment to attract foreign talent. The ultimate goal is to benefit the local economy and the local Malaysian workforce through the transfer of skills and knowledge from counterparts overseas. As part of the ETP, 12 sectors for growth and development, known as National Key Economic Areas (NKEA), have been identified. These are:
  • Agriculture
  • Business services
  • Communications, content and infrastructure
  • Electronics and electrical
  • Education
  • Financial services
  • Healthcare
  • Oil, gas and energy
  • Palm oil and rubber
  • Tourism
  • Wholesale and retail
  • Greater Kuala Lumpur/Klang Valley
By introducing the new Employment Pass (Category III), the Malaysian Immigration Department (MID) has made it possible for companies to hire expatriates with specialized skills not readily available in the local labour market and who ordinarily would have been ineligible due to their monthly base salary being lower than the minimum requirement of MYR 5000. Expatriates hired under this category must receive a minimum monthly base salary ranging from MYR 2,500 to MYR 4,999 and be employed in a sector within one of the twelve  NKEAs, amongst other eligibility criteria.
In order to hire a foreign national under this category, the employer in Malaysia needs to first obtain an exemption from the MYR 5,000 minimum salary requirement from the Ministry of Home Affairs. An exemption is valid for one year and must be requested annually, as required.
Holders of an Employment Pass (Category III) are not permitted to sponsor Dependant’s Passes or Long Term Social Visit Passes. The Employment Pass (Category III) can generally be renewed twice, for up to twelve months at each renewal and at the discretion of the authorities, who will also reassess the employer’s eligibility to sponsor applications under this category at that time. 
The enhancements to the West Malaysian immigration process to date have been positive and we envisage further reforms as Malaysia gets closer to realizing its socio-economic goals for the year 2020.
Fragomen Malaysia continues to closely monitor these and other potential enhancements to the immigration process and will continue to keep our clients informed. If you have any questions or would like to learn more about these changes, please do not hesitate to contact your Fragomen immigration professional or contact us via email at [email protected].