[Malaysia] New internship rule could be bad for business

In Malaysia, interest groups fear that a new rule requiring companies to provide internships for college and university students may result in added costs for businesses and scare away foreign investors, FMT reports.

The Malaysian International Chamber of Commerce and Industry (MICCI) and the Malaysian Employers Federation (MEF) said the rule could make Malaysia less attractive to multinational companies and hurt industries that rely on skilled foreign workers.

The new rule reportedly requires companies to place up to three students in internships for every expatriate it employs. A pilot phase will run from Feb 15 to Dec 31 before the policy is fully enforced in 2026.

MICCI president Christina Tee told FMT that the policy could leave Malaysia at a disadvantage compared to Singapore and Vietnam, which have more business-friendly expatriate policies.

“Tying obligations to expatriate hiring may restrict talent mobility, making it difficult for MNCs to deploy high-level expertise when needed,” she said. “We foresee companies, especially SMEs, facing challenges due to limited capacity and resources to implement the policy.”

The Malaysian government has promised tax breaks and support through programmes such as the paid and structured internship incentives programme and Ilham.

However, Ms Tee said this might not be sufficient to cover the costs of running proper internship programmes.

Syed Hussain Syed Husman - MEF president - reportedly said the organisation did not agree that expatriate hires should be linked to internships, especially as companies would have to spend money and time training interns.

In a statement, he said that supervising interns while managing expatriates would increase the workload of managers: “To link the employment of expats with placement of interns is very short-term thinking that may lead to self-destruction”.

The MEF president added that many industries need foreign experts to help local companies learn advanced skills, and the policy could prevent companies from employing expatriates.

“The reality is that Malaysia needs the expats…not that the expats need Malaysia,” he said.

The human resources ministry reportedly stated that the new internship policy is aimed at helping 100,000 college and university students. The ministry said the policy will help students gain skills that will prepare them for the workplace.

Source: FMT

(Quotes via original reporting)

In Malaysia, interest groups fear that a new rule requiring companies to provide internships for college and university students may result in added costs for businesses and scare away foreign investors, FMT reports.

The Malaysian International Chamber of Commerce and Industry (MICCI) and the Malaysian Employers Federation (MEF) said the rule could make Malaysia less attractive to multinational companies and hurt industries that rely on skilled foreign workers.

The new rule reportedly requires companies to place up to three students in internships for every expatriate it employs. A pilot phase will run from Feb 15 to Dec 31 before the policy is fully enforced in 2026.

MICCI president Christina Tee told FMT that the policy could leave Malaysia at a disadvantage compared to Singapore and Vietnam, which have more business-friendly expatriate policies.

“Tying obligations to expatriate hiring may restrict talent mobility, making it difficult for MNCs to deploy high-level expertise when needed,” she said. “We foresee companies, especially SMEs, facing challenges due to limited capacity and resources to implement the policy.”

The Malaysian government has promised tax breaks and support through programmes such as the paid and structured internship incentives programme and Ilham.

However, Ms Tee said this might not be sufficient to cover the costs of running proper internship programmes.

Syed Hussain Syed Husman - MEF president - reportedly said the organisation did not agree that expatriate hires should be linked to internships, especially as companies would have to spend money and time training interns.

In a statement, he said that supervising interns while managing expatriates would increase the workload of managers: “To link the employment of expats with placement of interns is very short-term thinking that may lead to self-destruction”.

The MEF president added that many industries need foreign experts to help local companies learn advanced skills, and the policy could prevent companies from employing expatriates.

“The reality is that Malaysia needs the expats…not that the expats need Malaysia,” he said.

The human resources ministry reportedly stated that the new internship policy is aimed at helping 100,000 college and university students. The ministry said the policy will help students gain skills that will prepare them for the workplace.

Source: FMT

(Quotes via original reporting)