Hiring Foreign Employees in Malaysia: Visa and Work Permit Requirements

Introduction

Explanation of the importance of hiring foreign talent in Malaysia and the different visa categories required for employment.

Employment Visa Types in Malaysia

Malaysia offers different types of visas and permits for foreign workers, depending on the nature and duration of their employment. The most commonly used permits include the Employment Pass (EP) and the Professional Visit Pass (PVP). Each visa has specific requirements and conditions that employers and employees must meet before the foreign worker can legally work in Malaysia.

1. Employment Pass (EP)

The Employment Pass is designed for foreign nationals who are highly skilled professionals, managers, or technical experts. This pass allows foreign workers to be employed by companies in Malaysia for a minimum of 2 years and is typically issued for higher-level positions that cannot easily be filled by the local workforce.

Who is eligible?

‍Foreign employees who have a contract with a company in Malaysia for at least 2 years and are earning a minimum monthly salary of MYR 3,000 are eligible for the Employment Pass. The salary threshold may vary based on the role and the employment category. There are three categories of Employment Pass based on salary and role:

Category I (top-tier professionals)

Category II (mid-level professionals)

Category III (technical staff).

How to apply:

‍The application for the Employment Pass is submitted by the employer through the Expatriate Services Division (ESD) portal. The process involves providing proof of the employee’s qualifications, details of the job role, and meeting the salary criteria.

2. Professional Visit Pass (PVP)

The Professional Visit Pass is intended for foreign employees who are temporarily in Malaysia to provide expert services, training, or technical assistance. Unlike the Employment Pass, the PVP is valid for a shorter period, usually ranging from 3 to 12 months.

Who is eligible?

‍Foreign professionals who are not directly employed by a Malaysian company but are providing short-term services under a contract with a foreign or Malaysian company are eligible for the PVP. Common industries using this visa include technology, engineering, and healthcare.

How to apply:

‍The employer or sponsoring company must apply for the PVP through the ESD portal. Documentation such as proof of the employee’s expertise, project details, and contract must be provided. The PVP does not allow long-term employment in Malaysia but is suitable for short-term, project-based work.

Employer Requirements for Hiring Foreign Workers

Malaysia has set specific requirements for employers who wish to hire foreign workers. Employers must register with the Expatriate Services Division (ESD) and submit the necessary documentation to prove that the position being offered to a foreign worker cannot be filled by a local candidate. This ensures that local talent is given priority and that foreign employees are only hired for roles requiring specialized skills.

Employer Registration with ESD (Expatriate Services Division)

Before hiring a foreign worker, employers must register with the Expatriate Services Division (ESD), which is the primary agency responsible for processing work visas and permits for expatriates in Malaysia. This registration allows the employer to submit applications for Employment Passes or Professional Visit Passes through the ESD portal.

• Requirements for registration:
  ‍To register with the ESD, employers must provide a company profile, details of the business operations, and proof of financial stability. The company must also meet the eligibility criteria set by the Malaysian government, including minimum capital requirements and proof that the foreign worker’s role is critical to the company’s operations.

• Approval process:
  ‍Once the ESD registration is complete, employers can begin submitting work permit applications. The ESD will assess the company’s ability to hire foreign workers based on its track record, compliance with immigration laws, and the need for foreign expertise in the company’s sector.

Preparing and Submitting the Necessary Documentation

Employers must provide several documents when applying for a work permit for a foreign employee. The documentation ensures that both the employer and employee meet the requirements set by Malaysian immigration authorities.

• Documents required:
  ‍Key documents include the employee’s passport, academic qualifications, a detailed job description, the employment contract, and evidence that the salary and conditions offered meet Malaysian standards.
  The employer must also provide proof that the company has made efforts to hire local workers for the position before turning to foreign talent.

Work Permit Application Process in Malaysia

The application process for work permits in Malaysia can be divided into several stages, including preparing documentation, submitting the application, and waiting for approval. Below is a detailed breakdown of the process for both the Employment Pass (EP) and Professional Visit Pass (PVP).

Detailed Process for Employment Pass

1. ESD Registration:
   Employers must first register their company with the Expatriate Services Division (ESD) to be eligible to hire foreign employees. This step involves providing detailed information about the company, including financial statements and a description of the business operations.
2. Submit Employment Pass Application:
   Once registered, the employer submits an application for the Employment Pass on behalf of the foreign employee. Required documents include the employee’s qualifications, job offer letter, and proof of salary that meets the minimum threshold. The employer must also demonstrate that the position cannot be filled by a local candidate.
3. Approval from Immigration Department:
   After submission, the application is reviewed by the Immigration Department, and if approved, the employee will be issued an Employment Pass. The processing time can range from 2 to 8 weeks depending on the complexity of the application and the category of Employment Pass applied for.
4. Final Steps:
   Once the application is approved, the employee can travel to Malaysia and begin work. Employers must ensure that the foreign worker’s pass is renewed before it expires and that they comply with all visa conditions.

Detailed Process for Professional Visit Pass

1. Submit PVP Application:
   The employer or sponsoring company submits the Professional Visit Pass application through the ESD portal. Required documents include proof of the project or service being provided, details of the contract, and the employee’s qualifications.

1. Approval from Immigration Department:
   The Immigration Department will review the PVP application and issue the pass if approved. This process usually takes between 2 to 4 weeks.

1. Final Steps:
   Once the pass is issued, the foreign employee can begin their temporary work in Malaysia. The PVP must be renewed if the employee needs to extend their stay beyond the initial duration.

Timeline and Government Fees

The processing time for both the Employment Pass and Professional Visit Pass can vary based on the complexity of the application and the specific category of visa being applied for. Typically, the approval process for the Employment Pass takes between 2 to 8 weeks, while the Professional Visit Pass takes 2 to 4 weeks.Government fees for work permits in Malaysia depend on the category of visa and the length of the permit. Employers are typically responsible for covering these costs, which range from MYR 200 to MYR 1,500 (USD 50 to USD 350), depending on the permit duration and category.

Compliance and Regulatory Considerations

Employing foreign workers in Malaysia requires strict compliance with the country’s immigration and labor laws. Employers must ensure that all visa applications are handled correctly and that foreign workers meet the conditions outlined in their work permits.

Rules on Employing Expatriates

Malaysia places certain restrictions on hiring expatriates to protect the local workforce. Employers must provide a strong justification for hiring foreign employees and demonstrate that local candidates were considered for the position first.

• Labor market testing:
  ‍Employers may need to conduct labor market testing, which involves advertising the position locally and proving that no suitable Malaysian candidate was available.

Penalties for Non-Compliance

Failure to comply with immigration regulations can result in significant penalties, including fines, visa cancellation, and the deportation of the foreign employee. Employers are also at risk of having their ESD registration revoked, which would prevent them from hiring foreign workers in the future.

How AYP Can Help

Navigating Malaysia’s work permit and visa application process can be complex, but AYP is here to simplify it for you. With our Professional Employer Organisation (PEO) and Employer of Record (EOR) services, we handle the administrative burden of hiring foreign employees, from registering with the ESD to applying for Employment Passes and Professional Visit Passes.

AYP ensures that your business stays compliant with Malaysia’s immigration laws, enabling you to focus on what matters most—growing your business. Our services include processing visa applications, ensuring timely renewals, and managing all aspects of expatriate employment. Let AYP take care of the complexities while you enjoy the benefits of hiring top talent in Malaysia.