Learn more about how to start a business / company in Malaysia and how to operate it properly under the laws of Malaysia. If you're starting up new, the articles are very useful for new business owners too.
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It is not surprising to find out that we might be working in a different country due to various reasons in today’s society. For foreigners who plan to work in Malaysia, the first question that comes to mind might be: “Are there any permits required to apply in order to work legally?”. The answer to this doubt is a yes, in which you have to apply for an employment pass and dependent pass for yourself and your family. Basically, an employment pass known as a working visa enables foreign residents (often managers, executives, and skilled professionals) to live and work legally in Malaysia. On the other hand, a dependent pass permits the foreigner’s family members to reside in Malaysia as well, even though dependent pass holders are generally prohibited to work or generate an income in Malaysia.
Expatriates are only permitted to work for the company stated in his or her employment pass. The holder is required to reapply for a new employment pass if they switch employers. Malaysian companies fall under strict legislations which limits the number of foreign expatriates that one can employ. Thus, the employer must demonstrate to the government that the foreign expatriates it plans to hire are essential and that their positions cannot be filled by locals. Ensuring one’s eligibility is a must for companies who wish to apply for an employment pass. The application criteria are listed as below:
|Equity||Paid-Up Capital Required|
|100% Local Owned||RM 250,000|
|Joint Venture (minimum foreign equity is 30%)||RM 350,000|
|100% Foreign Owned||RM 500,000|
|Foreign-owned companies (foreign equity at 51% and above) operating in the Wholesale, Retail and Trade (WRT) sectors (mandatory requirement to submit valid WRT license, if applicable). Please refer to the Ministry of Domestic Trade and Consumer Affairs for WRT license application guidelines. OR Foreign-owned companies (foreign equity at 51% and above) involved in the sub sectors on unregulated services are required to refer to the Services Industry Division, Ministry of Domestic Trade and Consumer Affairs on the application guideline to obtain approval.||RM 1,000,000|
The minimum requirements to apply for an expatriate post are as follows:
If the expatriate is only to act as a shareholder, these are the requirements:
|Employment Pass Categories||Description||Remarks|
|EP Category I||Applicants must earn a minimum salary of RM 10,000 per month and above with a minimum employment contract of 5 years and beyond. This EP is valid up to 5 years, renewable every 5 years and applicants are allowed to bring dependents and hire a foreign domestic helper.||This EP is usually for key positions such as CEOs, COOs, Managing Directors, Senior Partners, etc.|
|EP Category II||Applicants must earn a minimum salary of RM 5,000 to RM9,999 per month with a minimum employment contract of 2 years. This EP is valid up to 2 years, renewable every 2 years and applicants are allowed to bring dependents and hire a foreign domestic helper.||This EP is usually for managerial and professional positions such as managers, lecturers, directors, architects, etc.|
|EP Category III||Applicants must earn a minimum salary of RM 3,000 to RM4,999 per month with a minimum employment contract not exceeding 12 months. This EP is renewable up to 2 times only and applicants are NOT allowed to bring dependents and hire a foreign domestic helper.||This EP is usually for non-executive positions that require significant work experience and specific technical or practical skills such as designers (fashion, manufacturing, furniture), craftsmen, technicians, engineers, etc.|
*Note: Companies intending to apply for EP Category III must first receive approval from the Ministry of Home Affairs to seek exemption from the minimum salary requirement of RM5,000 before making an application.
Companies regulated by an Approving Agency or Regulatory Body need to submit an approval letter from the relevant Approving Agency/ Regulatory body for all Employment Pass categories. As these Approving Agencies/ Regulatory Bodies regulate companies in specific economic sectors, they are as such responsible for approving and supporting expatriate posts in the relevant sectors.
*Note: Companies are reminded that it is their responsibility to ensure that they have all the valid required license(s) and approval(s) for company registration purposes.
Depending on the Applicant’s profession, the Applicant’s employer has to apply for the Expatriate Post at one of the following government-approved agencies:
Once the Expatriate Committee or another authorized agency has approved the employer’s application, the employer can proceed to apply the Employment Pass.
The following sectors are restricted from applying for employment pass under the Guidelines on Foreign Participation in the Distributive Trade Services Malaysia:
The Dependent Pass provides foreigners with permission to bring their families with them while they are living in Malaysia to study or work.
Dependent Pass is eligible for whoever fulfils the criteria as the following:
Individuals who hold Employment Pass Category 3, Temporary Employment Pass, or a Professional Visit Pass are NOT allowed to apply for a Dependent Pass for their family members. Moreover, student Pass holders who are in BA studies or lower, or in a language school are also NOT allowed to apply for a Dependent Pass for their family members.
If you fulfil the criteria to apply for the Employment Pass, the following are the family members you can apply for a Dependent Pass:
If you want to bring your common-law spouse (unmarried), dependent parents or parents-in-law, or children over 21, you must apply for the Long Term Social Visit Pass.
On the other hand, if you are a Student Pass holder, you can apply for a Dependent Pass for the following family members:
The duration of your family members’ Dependent Pass will be equivalent with your own Employment Pass or Student Pass, while the pass is renewable. Take note that Dependent Pass holders are PROHIBITED to work in Malaysia. For which of your family member who plans to start working in Malaysia, their Dependent Pass is compulsory to be converted into an Employment Pass.
Foreign nationals who wish to stay in Malaysia for a duration longer than six months are required to apply for a Long Term Social Visit Pass. It is given to foreigners who require medical treatment in Malaysia as well as to family members of Employment Pass holders or spouses of Malaysian residents.
The Long Term Social Visit Pass (sometimes also known as “Spouse Visa”) is available to:
The Long Term Social Visit Pass is issued for a minimum of 6 months and a maximum of 5 years. Application for renewal is allowed as long as it is done before expiration.
Long Term Social Visit Pass holders are NOT permitted to work while holding a Long Term Social Visit Pass. The Long Term Social Visit Pass must be changed into an Employment Pass if your family member wants to begin working.
Spouses of Malaysian citizens can work in Malaysia without having to change their Long Term Social Visit Pass into an Employment Pass.
They have to get an endorsement to work in their passport by the Immigration Department of Malaysia.
To apply for the work endorsement, the spouse has to submit the following documents to the Visa, Pass and Permit Division of the Immigration Headquarters or the nearest state Immigration office.:
The Residence Pass Talent (RP-T), commonly referred to as the “Talent Pass,” is a renewable document that allows the holder to work in Malaysia for up to ten years. The RP-T holder is free to switch employment as much as he wants without having to renew his Employment Pass each time. The spouse of an RP-T holder is eligible to look for work without having to submit an Employment Pass application.
The RP-T holder is permitted to go to Malaysia with his spouse and any children aged below 18. In order to bring his parents and children aged above 18 to Malaysia, the RP-T holder can assist them in applying for a Long Term Social Visit Pass.
All applications for the RP-T will be processed by the Malaysia Expatriate Talent Service Center, which is under the control of Talent Corporation Malaysia Berhad (MYXpats Centre).
Only talented foreign expatriates who meet the following requirements and are currently residing and employed in Malaysia will be granted the RP-T:
Foreign expatriates in the following industries, known as “key economic areas”, are more likely to receive a RP-T:
There is a special category of RP-T for MTEP under MDEC. This is only designed for established tech entrepreneur.
The Malaysia Tech Entrepreneur Programme (MTEP) is intended for foreign tech founders who wish to enter Malaysia for a period of one year (new entrepreneurs) or five years (established entrepreneurs) in order to gain access to the ASEAN market.
The application is to be made via MDEC and once MDEC approves, the Immigration Department will issue either a Professional Visit Pass or a Residence Pass. It is widely considered to be a fast-track route (within 6 weeks) compared to the ordinary Employment Pass route (which may take between 4-6 months). Also, there is no minimum paid up capital requirement (although we recommend that you should inject certain paid up capital to show seriousness in your business).
Duration of pass: 1 year
Type of pass: Professional Visit Pass – MTE
Allowed to bring dependent: No
What happens after 1 year? Can apply to upgrade to Residence Pass – MTE (for Established Entrepreneur) or apply for the usual Employment Pass .
Duration of pass: up to 5 years
Type of pass: Residence Pass – MTE
Allowed to bring dependent: Yes
The Pass under the MTEP is only issued to foreign tech founders who fulfil the following criteria:
Details on the market opportunity, suggested business idea, and financial arrangements. (e.g. about your business, product/solutions, plans in Malaysia, personal profile/capabilities in contributing to tech ecosystem, key highlights/achievements, testimonials, etc).
3 months personal bank statement (minimum amount of RM50,000 but not limited to Malaysian banks)
3 months personal bank statement (minimum amount of RM50,000 but not limited to Malaysian banks) and proof of business performance (i.e: Management Accounts, Audited Accounts, Financial track record etc).
A document issued from the embassy or enforcement agency that states of no criminal record of an applicant in their residing country
Foreign talent with sufficient professional credentials or skills is issued a Professional Visit Pass (PVP). They may temporarily enter the nation to provide services or receive hands-on training from a Malaysian business on behalf of an outside organisation.
A PVP has a 12-month validity period and can be extended for an additional 12-month period can be granted through renewal application. A PVP holder must be legitimately employed and paid by an overseas business in order to travel, and he is not permitted to bring along dependents.
You can work in Malaysia with a Professional Visit Pass if you fall under one of the following categories:
Yes, all Sdn Bhd companies are allowed to apply for an EP, except for those who fall under restricted sectors are then prohibited to apply.
Kindly take note that companies with or more than 51% foreign shareholding and operating in the Wholesale, Retail and Trade (WRT)sectors required to have the WRT license before they are entitled to apply for an EP.
The following sectors are PROHIBITED from applying for employment pass under the Guidelines on Foreign Participation in the Distributive Trade Services Malaysia:
First of all, please ensure that your company can meet the requirements to apply for an Employment Pass which is required by the Immigration Department. Please refer to the table above regarding Table 1 and 2.
No, the Paid-Up Capital requirement is the minimum requirements fixed by the Immigration Department for companies who wish to apply for an Employment Pass.
It mostly depends on the qualifications of the applicants. You can refer to the minimum requirements for application to increase the possibility of successful application:
If the expatriate is only to act as a shareholder, these are the requirements:
No, there is no such thing as a Business Owner Visa in Malaysia. Application for an Employment Pass is the only method for all directors or employees who wish to work in Malaysia.
Yes, you can. As long as you can prove the sum of capital has been deposited to the bank account.
However, do bear in mind that the withdrawal of capital will become the amount of debt towards the company for whoever received the fund e.g. amount owing by shareholder / director.
The Immigration Department will usually approve a 1 year Employment Pass for new application. The applying company can renew the pass 3 months BEFORE the expiry date. The renewal procedure is quite simple and straightforward. The approval for pass renewal depends on the Immigration Department’s decision.
Basically, there are 2 stages:
First Stage: Applying company to register an ESD account. (Approx 2 – 3 months)
Second Stage: Employment Pass application (Approx 2 – 3 months)
The whole process is estimated to cost around RM 10,500 to RM 9000 (with MyFutureJob exemption).
No, the approval decision solely depends on the decision by the Immigration Department.
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