Malaysia: Succession Plan Requirement for ESD and MDEC Companies Deferred to January 2027

The government has announced that it will not enforce the new succession plan requirement for employers in the Expatriate Services Division (ESD) and Malaysia’s Digital Economy Corporation (MDEC) until January 1, 2027. This deferment will help employers evaluate their workforce needs and establish suitable succession planning processes, which involves establishing knowledge transfer training plans.   

The succession plan measure, originally announced January 2026 and originally intended to begin on June 1, 2026, requires employers hiring foreign nationals to implement structured plans to train local employees throughout the duration of the foreign national’s employment to support local talent development while maintaining business continuity.   

The succession plan requirement is part of Malaysia’s revised Employment Pass salary policy, implemented June 1, 2026. 

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