General framework

Legislation

What primary and secondary legislation governs immigration in your jurisdiction?

The primary legislation that governs immigration in Malaysia is the Immigration Act 1959/63, while the Passport Act 1966, the Immigration Regulations 1963 and the Anti-Trafficking In Persons and Anti-Smuggling of Migrants Act 2007 comprise the secondary legislation.

International agreements

Has your jurisdiction concluded any international agreements affecting immigration (eg, free trade agreements or free movement accords)?

Among others, Malaysia has established bilateral free trade agreements with the following countries: Australia, Chile, India, Japan, New Zealand, Pakistan and Turkey. The free trade agreements contain provisions that enhance and facilitate the movement of natural persons engaged in the conduct of trade in services, goods and investment between the parties.

Malaysia is also a member of the Asia Pacific Economic Cooperation (APEC), which is a regional economic forum to ensure that goods, services, investment and people move easily across borders. APEC members facilitate this trade through faster customs and immigration procedures at borders; more favourable business climates behind the border; and aligning regulations and standards across the region. APEC cardholders also enjoy the privilege of express immigration processing upon arrival and departure through premier lanes in Malaysia.

In addition, there is also a free flow facility available at Wang Kelian in Perlis, Thailand, for Thai and Malaysian nationals to enter or exit through without the need for travel documents within the restricted free flow areas.

Regulatory authorities

Which government authorities regulate immigration and what is the extent of their enforcement powers? Can the decisions of these authorities be appealed?

The Malaysian Immigration Department is the government authority that regulates immigration. It has wide enforcement powers, which include, inter alia:

  • perform operations and inspections to ensure compliance with immigration laws;
  • carry out arrests and rescues;
  • conduct investigations and prosecutions; and
  • manage the compounding of offences and deportation or repatriation of detainees.

Every immigration officer has the authority and power of a police officer to enforce any of the provisions of the Immigration Act 1959/63 relating to arrest, detention or removal. The decision of the Immigration Department is appealable and can be made to the relevant division within the Immigration Department.

Government policy

In broad terms what is your government’s policy towards business immigration?

As a developing country, Malaysia seeks to limit the inflow of migrant workers in order to protect the interests of its people. This is clearly reflected in the government-implemented policies that promote training and employment for all levels of the local workforce. Companies and employers are therefore encouraged to prioritise the employment of locals and only employ foreign talent where there is no suitable local talent to take up the particular position.

The main source of immigration law in Malaysia, the Immigration Act 1959/63, has the objective of regulating and controlling the import of foreign employees, as well as matters pertaining to their hiring, employment and repatriation. With its objective of achieving a high-income nation status, the Malaysian government is proactively taking steps to prevent an influx of foreign employees from jeopardising the security and sovereignty of the country.

Short-term transfers

Visas

In what circumstances is a visa necessary for short-term travellers? How are short-term visas obtained?

Short-term travellers must enter Malaysia with a valid and applicable visa. A single-entry visa known as the social visit pass is issued to foreign citizens for social and business visits in Malaysia, but this does not extend to employment in Malaysia. Applicants must apply for the pass in person by filling in the relevant form and producing the required documents at the entry point.

Restrictions

What are the main restrictions on a business visitor?

A social visit pass is normally valid for a single entry and for a period of 30 days from the date of issuance. However, the validity period may differ according to the country of origin. The limited business activities permitted under a social visit pass include the following:

  • attending meetings, conferences, business discussions or seminars;
  • inspecting factories;
  • auditing a company’s accounts;
  • signing an agreement;
  • carrying out a survey on investment opportunities; and
  • setting up a factory.
Short-term training

Is work authorisation or immigration permission needed to give or receive short-term training?

Yes, a professional visit pass is required for giving or receiving short-term training.

Transit

Are transit visas required to travel through your country? How are these obtained? Are they only required for certain nationals?

A transit visa is issued upon arrival to applicants who intend to enter Malaysia on transit to other countries, and is valid for a maximum of five days with no extensions allowed. The issuance of the transit visa is solely at the discretion of the immigration authorities. Foreign nationals on transit without leaving the airport premises and who continue their journey to the next destination with the same flight do not require a transit visa.

Visa waivers and fast-track entry

Are any visa waiver or fast-track entry programmes available?

A business traveller may be relieved of the need for a visa when entering Malaysia for short-stay business visits with the APEC Business Travel Card (ABTC). However, the ABTC is limited to citizens of the following countries: Australia, Brunei, Chile, China, Hong Kong, Indonesia, Japan, Korea, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand and Vietnam.

A visa is also not required for a person from commonwealth countries, except for citizens of Bangladesh, Cameroon, Ghana, Pakistan, Nigeria and Mozambique. All nationals from the Association of Southeast Asian Nations countries, except Myanmar, do not require a visa for a stay of less than one month.

The Malaysia Automated Clearance System (MACS) was developed to provide fast-track immigration clearance for non-Malaysian investors, business persons and professionals. This service is also available to frequent travellers among the citizens and permanent residents of Singapore, and also for those who hold relevant long-term immigration passes and frequently travel between Malaysia and Singapore for the purpose of working, studying or staying in Malaysia.

MACS is only a form of fast-track facilitation and does not act as an immigration pass or visa. Visitors are still required to obtain a visa (if applicable) and will subsequently be issued with the relevant immigration pass.

Long-term transfers

Categories

What are the main work and business permit categories used by companies to transfer skilled staff?

Subject to the nature of work in Malaysia, companies and employers who employ skilled staff will need to obtain an employment pass or professional visit pass. Employment passes are issued to foreign citizens who enter Malaysia for purposes of paid employment under a contract of service with a Malaysian entity and are divided into three categories, namely:

  • category I: the position applied for pays a minimum salary of 10,000 ringgit per month and is for a foreign employee with a contract of employment for up to five years;
  • category II: the position applied for pays a salary of between 5,000 and 9,999 ringgit per month and is for a foreign employee with a contract of employment for up to two years; and
  • category III: the position applied for pays a salary of between 3,000 and 4,999 ringgit per month and is for a foreign employee with a contract of employment for less than 12 months. A foreign employee under this category may renew the pass twice.

The professional visit pass is issued to foreign citizens who are engaged in temporary or short-term business or contracted activity for a Malaysian entity. Holders of all passes may only work in West Malaysia.

Procedures

What are the procedures for obtaining these permissions? At what stage can work begin?

Applications for employment passes and professional visit passes must be submitted online to the Immigration Department through its Expatriate Services Department (ESD) portal, unless the companies are under the purview of a specific approving agency or regulatory body. Briefly, there are four stages in the applications for these visas, namely:

  • company registration on the ESD portal: the Malaysian entity sponsoring the foreign employee’s visa must create an account and company profile in the ESD portal. This is a one-off registration and the company will be required to submit all related company information and documents in support of the registration;
  • company activation process: upon successful registration of the company on the ESD portal, the company will be required to schedule an appointment via the ESD online system for its director to be present at the immigration office to sign the letter of undertaking in the presence of the immigration officer;
  • application for visa: the registered company may then proceed to apply for the requisite visa for its foreign employee. All supporting documents must be submitted through the ESD portal and the status notification of the application will be sent via the ESD system to inform the company of whether the visa application is approved or rejected. Foreign employees shall not work in Malaysia until a valid visa is issued to them; and
  • endorsement: once the visa application has been approved, the foreign employee must endorse the visa on his or her passport. Foreign employees who have entered Malaysia will have 30 days from the date of entry to pay visa fees and endorse the relevant passes.

The application process may commence three months prior to the scheduled arrival of the foreign employee in Malaysia.

Period of stay

What are the general maximum (and minimum) periods of stay granted under the main categories for company transfers?

For foreign employees under an employment pass, the period of stay is dependent on the length of his or her employment as provided in his or her contract of employment according to the category applied for, with a maximum period of five years. Foreign employees under a professional visit pass can stay in Malaysia for a maximum of 12 months.

Processing time

How long does it typically take to process the main categories?

Following the submission of all required documents, it takes 14 working days for the process to be completed. The 14 working days may be extended because of incomplete applications, insufficient supporting documents, queries by the authorities or additional inspection requirements. In practice, there are often delays in the processing time. It is therefore recommended to allow at least two months for the process to be completed.

Staff benefits

Is it necessary to obtain any benefits or facilities for staff to secure a work permit?

It is not necessary to obtain any benefits or facilities for skilled workers. For low-level foreign workers, the Ministry of Health implemented the Foreign Workers Health Insurance Protection Scheme in 2011, wherein sits the mandatory Foreign Workers Hospitalisation and Surgical Scheme. All low-level foreign workers in Malaysia are required to be insured for an annual premium of 120 ringgit. An employer is also required to take out insurance for foreign workers falling under the Workmen’s Compensation Act 1952, which, in practice, is generally limited to manual labourers.

Assessment criteria

Do the immigration authorities follow objective criteria, or do they exercise discretion according to subjective criteria?

The immigration authorities generally follow objective criteria in granting the relevant visas to foreign employees. However, they may also exercise their discretionary powers if they are of the opinion that the work may be done by a Malaysian citizen since the underlying principle is to protect and prioritise the rights and interests of local workers.

There is generally no flexibility to accommodate complex circumstances within the rules. ESD-registered companies are required to strictly comply with the rules and requirements for the employment of foreign employees set out by the immigration authorities. Applications with incomplete or insufficient details will be returned.

High net worth individuals and investors

Is there a special route for high net worth individuals or investors?

Yes. The Malaysia My Second Home (MM2H) programme is promoted by the Malaysia Tourism Authority and the Immigration Department of Malaysia. This allows foreigners to stay in Malaysia for a period of 10 years on a multiple-entry social visit pass upon fulfilment of certain financial requirements. The social visit pass is initially for a period of 10 years, and is renewable at the end of the term. The applicants are expected to be financially capable of supporting themselves under the MM2H programme.

Applicants who are 50 years of age or older must show proof of a minimum liquid net worth of 350,000 ringgit and monthly offshore income of at least 10,000 ringgit. Upon arrival in Malaysia, the applicant must open a fixed deposit account in a Malaysian bank with a deposit of 150,000 ringgit.

Applicants who are under 50 years of age will need to demonstrate minimum liquid assets of 500,000 ringgit, as well as a monthly offshore income of 10,000 ringgit. Upon arrival in Malaysia, the applicant must deposit 300,000 ringgit into a local bank.

Is there a special route (including fast track) for high net worth individuals for a residence permission route into your jurisdiction?

Individuals with a high net worth may apply for an entry permit in accordance with section 10 of the Immigration Act and Regulation 4 of the Immigration Regulations 1963 to enter and reside in Malaysia as a permanent resident. See question 29 for further details.

Highly skilled individuals

Is there a special route for highly skilled individuals?

No, highly skilled individuals are still required to obtain employment passes or professional visit passes through the ESD portal. However, the residence pass - talent is available to foreign citizens considered to be high-achieving individuals with the capacity to drive business results that will contribute towards the national key economic areas.

The residence pass - talent allows the individual to work and live in Malaysia for up to 10 years, and applicants are required to:

  • have worked in Malaysia for a minimum of three continuous years prior to applying;
  • hold a valid employment pass with more than three months’ validity at the time of application;
  • earn a minimum basic monthly salary of 15,000 ringgit;
  • possess a Malaysian income tax file number and have paid income tax for at least two years;
  • hold a PhD, master’s or bachelor’s degree or a diploma in any discipline from a recognised university, or a professional or competency certificate from a recognised professional institute; and
  • possess a minimum of five years’ work experience.
Ancestry and descent

Is there a special route for foreign nationals based on ancestry or descent?

No.

Minimum salary

Is there a minimum salary requirement for the main categories for company transfers?

See question 10.

Resident labour market test

Is there a quota system or resident labour market test?

There is no quota system or resident labour market testing required. However, as part of the application process for obtaining low-level foreign workers, employers are required to first advertise the position locally. The companies intending to hire foreign employees may also be required to prove to the immigration authorities that there are no suitably qualified Malaysian nationals to undertake the work. The decision is at the Immigration Department’s discretion. Companies intending to employ foreign citizens are also required to provide projections to the immigration authorities on how many foreign employees they intend to employ for the year.

Shortage occupations

Is there a special route for shortage occupations?

No.

Other eligibility requirements

Are there any other main eligibility requirements to qualify for work permission in your jurisdiction?

There is a minimum education requirement of eligibility, with applicants requiring the following:

  • a degree or above, with at least three years’ experience in the relevant field;
  • a diploma, with at least five years’ experience in the relevant field; or
  • a technical certificate or equivalent, with at least seven years’ experience in the relevant field.
Third-party contractors

What is the process for third-party contractors to obtain work permission?

The immigration authorities require that employers apply for and obtain visas on behalf of the foreign employees whom they wish to employ. While authorised third parties are able to assist with the submission process and the collection of the visa on behalf of the employer, the documents for submission must be prepared or endorsed, or both, by the employer seeking to obtain the visa.

A foreign employee on a visa is required to comply with the conditions contained in the permit. Generally, such permits would include details on the place of employment of the foreign employee, and he or she may not work on other premises, otherwise this would be considered a breach of the conditions of the visa.

Recognition of foreign qualifications

Is an equivalency assessment or recognition of skills and qualifications required to obtain immigration permission?

Generally no, provided that the conditions discussed in question 23 are complied with.

Extensions and variations

Short-term to long-term status

Can a short-term visa be converted in-country into longer-term authorisations? If so, what is the process?

The social visit pass may be extended on special consideration, such as due to illness, accident or war in the applicant’s home country. The visitor must appear in person before the Malaysian Immigration Department, complete the requisite form and provide the necessary evidence, as well as presenting a confirmed return ticket to his or her home country or third country. Foreign nationals who are in Malaysia while their visa applications are pending will usually be required to leave the country, comply with the visa requirements and re-enter the country after being granted the final visa, in order to start work officially.

Long-term extension

Can long-term immigration permission be extended?

This depends on the type of permission or permit obtained. While employment passes, dependant passes and long-term social visit passes may be renewed or extended (subject to the fulfilment of the requisite conditions and at the discretion of the immigration authorities), a professional visit pass may not be extended past a period of 12 months.

Exit and re-entry

What are the rules on and implications of exit and re-entry for work permits?

As stated in question 26, foreign nationals who are already in Malaysia pending approval of their visa are required to leave the country, comply with the visa requirements and re-enter the country. This may lead to potential difficulties, such as disruption of travel plans that may only be finalised on the approval of the relevant visa, and the incurrence of additional costs and delays.

A foreign employee with a valid visa endorsed on his or her passport is generally not restricted from further exit or re-entry.

Permanent residency and citizenship

How can immigrants qualify for permanent residency or citizenship?

A foreign national who is not a Malaysian citizen may apply for an entry permit. There are four eligible categories of foreign nationals who may apply for permanent residency if the following requirements are satisfied:

  • to qualify as an investor:
    • the applicant must have a minimum fixed deposit of US$2 million at any bank in Malaysia. The individual will only be allowed to withdraw the funds after five years;
    • one Malaysian sponsor is required; and
    • the individual’s spouse and children under 18 years of age are eligible for permanent residency after five years’ residency in Malaysia;
  • to qualify as an expert:
    • the applicant must have expertise, talent and skill that is recognised as ‘world class’ by any international organisation;
    • a recommendation by the relevant Malaysian agency (depending on the applicant’s field of expertise) is required;
    • a certificate of good conduct from the expert’s country of origin is required; and
    • one Malaysian sponsor is required;
  • to qualify as a professional:
    • the applicant must be an individual with outstanding skills in a particular field;
    • a recommendation by the relevant Malaysian agency (depending on the applicant’s field of expertise) is required;
    • a certificate of good conduct from the professional’s country of origin is required;
    • one Malaysian sponsor is required; and
    • the applicant must have worked in any government agency or private company in Malaysia for a minimum of three years and must be certified by the relevant Malaysian agencies; and
  • to qualify as a spouse or child of a Malaysian citizen:
    • a spouse must:
      • be married to a Malaysian citizen;
      • be issued with a long-term visit pass and have stayed continuously in Malaysia for a period of five years;
      • submit a marriage certificate; and
      • be sponsored by his or her Malaysian spouse; and
    • a child under six years old must be sponsored by his or her parents.
End of employment

Must immigration permission be cancelled at the end of employment in your jurisdiction?

Yes, if the employment ends before the visa expires.

Employee restrictions

Are there any specific restrictions on a holder of employment permission?

A foreign employee may only work for the company or employer named in his or her visa. Additionally, those who obtain visas may not breach the terms and conditions of the relevant visa, including in relation to the place of work. As a promotion would result in a different job title for which the visa has been approved, the company would generally be required to cancel and re-apply for a visa for a foreign employee who has been promoted.

Holders of a visa may study without having to apply for a student pass, provided there is an offer from the respective institution of higher learning, but permission must be obtained from the immigration authorities.

Dependants

Eligibility

Who qualifies as a dependant?

Legal spouses and children under 18 years old qualify as dependants. However, unmarried couples, civil partners (same-sex partners) and cohabiting partners do not qualify as dependants.

Holders of an employment pass (categories I and II) are allowed to bring in their spouses and children under 18 years of age as dependants and may obtain long-term social visit passes for their parents, parents-in-law or children over the age of 18. Holders of an employment pass (category III) or a professional visit pass may not bring in dependants.

Conditions and restrictions

Are dependants automatically allowed to work or attend school?

Dependants are not allowed to work unless the dependant pass is converted into an employment pass in the usual manner.

Dependants under 18 years of age need not apply for a student pass for study in Malaysia, but permission must be obtained from the immigration authorities. However, dependants over 18 years of age must apply to convert their dependant pass to a student pass before they are allowed to undertake studies in Malaysia.

Access to social benefits

What social benefits are dependants entitled to?

Dependants are not entitled to any social benefits.

Other requirements, restrictions and penalties

Criminal convictions

Are prior criminal convictions a barrier to obtaining immigration permission?

There is no law in Malaysia that requires foreign employees to declare their past criminal convictions. However, the immigration authorities retain the discretion to accept or reject any foreign employee from commencing work in Malaysia.

Penalties for non-compliance

What are the penalties for companies and individuals for non-compliance with immigration law? How are these applied in practice?

The penalties imposed on individuals and companies for non-compliance of immigration laws in Malaysia are laid down under the Immigration Act, and differ according to the offence committed, as follows:

  • under section 6, any non-citizen who enters Malaysia without being in possession of a valid pass or a valid entry permit on which his or her name is endorsed shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding 10,000 ringgit or to imprisonment for a term not exceeding five years, or to both, and shall also be liable to a whipping of not more than six strokes. Under section 32(1), any individual who contravenes section 6 shall be liable to be removed from Malaysia by order of the Director General of Immigration;
  • under section 15, an individual who remains in Malaysia following the cancellation or expiry of any permit or pass shall be guilty of an offence and shall, on conviction, be liable to a fine of not less than 10,000 ringgit or to imprisonment for a term not exceeding five years, or to both. Such person may also be removed from Malaysia by order of the Director General of Immigration and may be detained in custody for such period as may be necessary for arrangements to be made for his or her removal;
  • under section 55B, any individual who employs one or more persons who is not in possession of a valid permit shall be guilty of an offence and shall, on conviction, be liable to a fine of between 10,000 and 50,000 ringgit or to imprisonment for a term not exceeding 12 months, or to both, for each such employee. However, if it is proved that five or more such employees are employed at the same time, that individual shall, upon conviction, be liable to imprisonment for a term of between six months and five years and shall also be liable to a whipping of not more than six strokes. If the offence has been committed by a body corporate, any person who at the time of the commission of the offence was a member of the board of directors, a manager, a secretary or a person holding an office or a position similar to that of a manager or secretary of the body corporate shall be guilty of the offence;
  • an occupier who permits any illegal immigrant to enter or remain at any premises shall be guilty of an offence and shall, on conviction, be liable to a fine of between 5,000 and 30,000 ringgit or to imprisonment for a term not exceeding 12 months, or to both for each illegal immigrant found at the premises and, in the case of a second or subsequent conviction, to a fine of between 10,000 and 60,000 ringgit or to imprisonment for a term not exceeding two years, or to both, for each illegal immigrant found at the premises;
  • under section 55E, any individual who harbours any person whom he or she knows, or has reasonable grounds to believe, that has acted in contravention of the Immigration Act shall be guilty of an offence and may be liable to a fine of between 10,000 and 50,000 ringgit for each person harboured. Where it is proved to the satisfaction of the court that five or more such persons are harboured, that individual shall be liable to imprisonment for a term of between six months and five years and shall also be liable to a whipping of not more than six strokes; and
  • section 57 also provides for a general penalty wherein any individual found to have committed any offence under the Immigration Act where no special penalty is provided shall, on conviction, be liable to a fine not exceeding 10,000 ringgit or to imprisonment for a term not exceeding five years, or to both.

Also, under section 18(1) of the Employment (Restriction) Act 1968, any person who employs a non-citizen without a valid employment permit shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding 5,000 ringgit or to imprisonment for a term not exceeding one year, or to both.

The enforcement of such penalties is carried out by the immigration authorities, which, among other things:

  • perform operations and inspections to ensure compliance with immigration laws;
  • carry out arrests and rescues;
  • conduct investigations and prosecutions; and
  • manage the compounding of offences and deportation or repatriation of detainees.
Language requirements

Are there any minimum language requirements for migrants?

No.

Medical screening

Is medical screening required to obtain immigration permission?

Foreign employees are not required by the immigration authorities to undergo medical screening, but employers may require them to undergo certain medical examinations before commencing employment.

However, the immigration authorities require low-level foreign workers to undergo medical screening to qualify for employment, including those who are applying for an employment pass (category III).

Secondment

Is there a specific procedure for employees on secondment to a client site in your jurisdiction?

A foreign employee is only allowed to work for the employer stated on his or her employment pass and at the address of the office stated on the same, and may not undertake other work. As such, there is no procedure for secondment.

Update and trends

Key developments of the past year

Are there any emerging trends or hot topics in corporate immigration regulation in your jurisdiction?

Key developments of the past year40 Are there any emerging trends or hot topics in corporate immigration regulation in your jurisdiction?

In line with the Malaysian government’s recent policy, the services of outsourcing companies in recruiting and managing foreign workers has been abolished to ensure better welfare of low-level foreign workers. The use of outsourcing companies, which supply and manage foreign workers in sectors such as manufacturing and construction, was terminated on 31 March 2019. These outsourcing companies are required to repatriate their foreign workers within the stipulated period to avoid prosecution. Foreign workers who are not involved in the process of changing employers will be dismissed through the system.

The Malaysian government will also be looking into developing a new immigration and border control system for the country.