Malaysia: Additional Approval or Registration Requirement for Companies Hiring Foreign Nationals Under MDEC

January 13, 2023

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Country / Territory

At a Glance

  • Starting February 1, 2023, companies hiring foreign nationals under the Malaysia Digital Economy Corporation (MDEC) will need to obtain an approval letter from the Department of Labour Peninsular Malaysia (JTKSM) or at least a proof of submission of registration at JTKSM when applying for Projection applications.
  • Companies must register under the appropriate sector or industry with the JTKSM, specific to the immigration category of the foreign national they are seeking to hire.
  • Companies who do not obtain the required approval or submit a registration will not be able to apply for Work Pass Projections which are required to apply for Work Passes for foreign nationals in Malaysia.

The situation

The Department of Labour Peninsular Malaysia (JTKSM) announced that companies hiring foreign nationals under the Malaysia Digital Economy Corporation (MDEC) will be required to obtain an approval letter or register online under the JTKSM when applying for Work Pass Projections (Projections) applications starting February 1, 2023. 

CHANGE DETAILS IMPACT
Additional approval or registration requirement for Projection applicants
    • Employers of foreign nationals under the MDEC must submit proof of prior approval from the Director General of Labour or at least proof of submission of a registration application in order to be eligible to apply for Projections.
    • Companies are subject to an additional step of obtaining additional approval from the JTKSM before applying for Projections, but will benefit from the alternative of submitting registration instead.
    • Companies who do not have approved Projections for 2023 will not be allowed to apply for Work Passes for their foreign nationals.
    • Companies must ensure that they register at the earliest opportunity to avoid any delays in obtaining Projections which will allow them to apply for Work Passes for their foreign nationals, as well as any penalties that may be imposed for noncompliance with the provisions of the Employment Act 2022 for failing to register.
Registration under specific sectors and industries
    • Companies may apply for registration under the appropriate sector or industry below:
      • Permitted sectors (manufacturing, services, plantation, agriculture, construction, mining and quarry);
      • Foreign domestic workers;
      • All other categories (such as expatriates, Professional Visit Pass holders, Student Pass holders, Malaysia My Second Home Program participants, Premium Visa Program participants, etc.);
    • Companies must ensure that they are registering under the appropriate government sector link for which they intend to hire foreign nationals under in order to avoid any delays or rejections in Work Pass applications.
Disclosure of certain employer and employee information
    • Companies must disclose certain information related to their operations such as:
      • The position being applied for;
      • Total number of existing local employees;
      • Total number of existing foreign employees;
    • Furthermore, companies will be required to respond to additional questions regarding the foreign national’s work.
    • Companies that refuse to respond to the requested information will forfeit the right to register and in effect forfeit the eligibility to apply for Projections from the government to employ foreign nationals.
  • Employment Act 2022. The Malaysian government implemented the new Employment (Amendment) Act 2022 which came into force in January 1, 2023 and is aimed at protecting local labor in Malaysia.
  • Additional requirement for Projections applications. Companies in Malaysia registered with the MDEC, who plan to submit initial or renewal Employment Pass (EP) applications in 2023, must obtain approvals for their foreign national number Projections before being able to apply.

It is very likely that the Expatriate Services Division (ESD) will adopt a similar requirement for companies applying for Projection applications and is likely to follow the new requirement by the MDEC. Fragomen will report on related developments.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].

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